Figure 10-19
-Refer to Figure 10-19. The social optimum can be reached if
A)a subsidy of $36 is applied to each unit of the good.
B)a subsidy of $23 is applied to each unit of the good.
C)a tax of $23 is applied to each unit of the good.
D)a tax of $15 is applied to each unit of the good.

Question

Figure 10-19 
-Refer to Figure 10-19. The social optimum can be reached if
A)a subsidy of $36 is applied to each unit of the good. 
B)a subsidy of $23 is applied to each unit of the good. 
C)a tax of $23 is applied to each unit of the good. 
D)a tax of $15 is applied to each unit of the good.

Quizplus · Accepted Answer

A subsidy of $36 would shift the supply curve to the right, increasing the quantity supplied and lowering the price to the social optimum.

Figure 10-19 -Refer to Figure 10-19. the Social Optimum Can Be Reached