The following graph shows the domestic supply and demand curves for a good. S1 and S2 represent the domestic industry supply before and after the provision of a subsidy by the government respectively, while D represents the domestic demand for the product. Prior to the subsidy, the country was importing 300 units of the good. Refer to the graph to answer the question. If the government provides a subsidy on domestic production, then the demand for imports is equal to:
A) 100 units.
B) 200 units.
C) 300 units.
D) 400 units.

Question

The following graph shows the domestic supply and demand curves for a good. S1 and S2 represent the domestic industry supply before and after the provision of a subsidy by the government respectively, while D represents the domestic demand for the product. Prior to the subsidy, the country was importing 300 units of the good. Refer to the graph to answer the question.  If the government provides a subsidy on domestic production, then the demand for imports is equal to:
A) 100 units. 
B) 200 units. 
C) 300 units. 
D) 400 units.

Quizplus · Accepted Answer

The Answer of The following graph shows the domestic supply and demand curves for a good. S1 and S2 represent the domestic industry supply before and after the provision of a subsidy by the government respectively, while D represents the domestic demand for the product. Prior to the subsidy, the country was importing 300 units of the good. Refer to the graph to answer the question.  If the government provides a subsidy on domestic production, then the demand for imports is equal to:
A) 100 units. 
B) 200 units. 
C) 300 units. 
D) 400 units.

The Following Graph Shows the Domestic Supply and Demand Curves