Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q₀ and that government purposely shifts the market supply curve from S to S₁ in diagram (a)on the left and from S to S₂ in diagram (b)on the right. The shift of the supply curve from S to S₁ in diagram (a)might be caused by a per-unit
A)subsidy paid to the producers of this product.
B)tax on the producers of this product.
C)subsidy paid to the buyers of this product.
D)tax on the buyers of this product.

Question

Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q₀ and that government purposely shifts the market supply curve from S to S₁ in diagram (a)on the left and from S to S₂ in diagram (b)on the right. The shift of the supply curve from S to S₁ in diagram (a)might be caused by a per-unit
A)subsidy paid to the producers of this product. 
B)tax on the producers of this product. 
C)subsidy paid to the buyers of this product. 
D)tax on the buyers of this product.

Quizplus · Accepted Answer

The Answer of  Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q₀ and that government purposely shifts the market supply curve from S to S₁ in diagram (a)on the left and from S to S₂ in diagram (b)on the right. The shift of the supply curve from S to S₁ in diagram (a)might be caused by a per-unit
A)subsidy paid to the producers of this product. 
B)tax on the producers of this product. 
C)subsidy paid to the buyers of this product. 
D)tax on the buyers of this product.

Refer to the Diagrams for Two Separate Product Markets