-Refer to the above figure. In the absence of a subsidy,
A) Qd would be demanded and QM would be supplied.
B) the price Pd would be charged and quantity QM demanded.
C) the quantity Qo and price Po would prevail in the market.
D) None of the above is correct.

Question

-Refer to the above figure. In the absence of a subsidy,
A) Qd would be demanded and QM would be supplied. 
B) the price Pd would be charged and quantity QM demanded. 
C) the quantity Qo and price Po would prevail in the market. 
D) None of the above is correct.

Quizplus · Accepted Answer

In the absence of a subsidy, the market would reach equilibrium where the demand and supply curves intersect, which is at quantity Qo and price Po. This point represents the market equilibrium without any external interventions like subsidies.

-Refer to the Above Figure