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

question 144

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-13

-Refer to Figure 4-13.The supply curve S and the demand curve D₁ indicate initial conditions in the market for flu shots.A new government program is implemented that grants buyers a $25 subsidy when they buy a flu shot,shifting the demand curve from D₁ to D₂.Which of the following is true for this subsidy given the information provided in the figure?

• A)The original price of a flu shot was $75,and after the subsidy,it rises to $90.
• B)$65 represents the net price a buyer must pay for a flu shot after taking into account the subsidy payment.
• C)Buyers of flu shots will receive an actual benefit of $10 from the subsidy,while sellers of flu shots will receive an actual benefit of $15 from the subsidy.
• D)All of the above are true.

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Definitions:

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the cost per unit of output.

Total Cost

The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

Fixed Cost

Costs that do not change with the level of output or production, such as rent, salaries, and insurance, which are incurred regardless of business activity levels.

Total Cost

The complete amount of expenses incurred by a business in producing goods or services, including both fixed and variable costs.