Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. One way that the government could shift demand to its socially optimal level is to
A)tax the sellers.
B)tax the buyers.
C)subsidize the sellers.
D)subsidize the buyers.

Question

Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. One way that the government could shift demand to its socially optimal level is to
A)tax the sellers. 
B)tax the buyers. 
C)subsidize the sellers. 
D)subsidize the buyers.

Quizplus · Accepted Answer

The Answer of  Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. One way that the government could shift demand to its socially optimal level is to
A)tax the sellers. 
B)tax the buyers. 
C)subsidize the sellers. 
D)subsidize the buyers.

Refer to the Provided Supply and Demand Graph