Refer to the Below Supply and Demand Graph

question 90

Multiple Choice

Refer to the below supply and demand graph.Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective.If government decides to correct this externality with a subsidy to consumers, then the:

• A)demand curve will shift from D₂ to D₁.
• B)supply curve will shift from S₁ to S₂.
• C)demand curve will shift from D₁ to D₂.
• D)supply curve will shift from S₂ to S₁.

---

Definitions:

Alcohol

A psychoactive substance commonly found in beverages like beer, wine, and spirits, capable of altering mood and behavior.

Cardiovascular System

The system of the body that includes the heart, arteries, and veins.

Balanced Placebo Design

A method used in research studies to determine the effect of the participant's expectations on the outcome by utilizing both active and inactive substances or treatments.

Schedule I Drug

A category of drugs not considered legitimate for medical use and with a high potential for abuse, as defined by the Controlled Substances Act.