Use the Figure Below to Answer the Following Question(s)

question 206

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-12
-Refer to Figure 4-12. The supply curve S and the demand curve D₁ indicate initial conditions in the market for college textbooks. A new government program is implemented that grants students a $30 per textbook subsidy on every textbook they purchase, shifting the demand curve from D₁ to D₂. Which of the following is true for this subsidy given the information provided in the exhibit?

• A) The original average selling price of textbooks was $100, and after the subsidy it rises to $120.
• B) $90 represents the net price a buyer must pay for a textbook after taking into account the subsidy payment.
• C) Textbook buyers will receive an actual benefit of $10 from the subsidy, while textbook sellers will receive an actual benefit of $20 from the subsidy.
• D) All of the above are true.

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