The figure below shows the demand and supply curves in the market for elementary education. Figure 13.1
In the figure,
D: Private demand curve for elementary education
D + s: Demand curve which includes public benefits
S: Supply curve of education
Price and Quantity have been taken on vertical and horizontal axes respectively.
-In Figure 13.1,D represents the private demand for education,and D+s represents the demand including the public benefits of education.According to the figure,the optimal subsidy is equal to:

Question

The figure below shows the demand and supply curves in the market for elementary education. Figure 13.1
 In the figure,
D: Private demand curve for elementary education
D + s: Demand curve which includes public benefits
S: Supply curve of education
Price and Quantity have been taken on vertical and horizontal axes respectively.
-In Figure 13.1,D represents the private demand for education,and D+s represents the demand including the public benefits of education.According to the figure,the optimal subsidy is equal to:

Quizplus · Accepted Answer

The optimal subsidy is the difference between the supply curve and the demand curve including public benefits (D+s-S) at the quantity where they intersect (point b in the graph). Therefore, the expression for the optimal subsidy is Q_sb - Q_sd. This corresponds to option D.

The Figure Below Shows the Demand and Supply Curves in the Market