The Figure Shows the Supply Curve (S) and the Demand

question 368

Multiple Choice

The figure shows the supply curve (S) and the demand curve (D) for college education. The external benefit from college education is $6,000 per student per year and is constant.
-In the figure above, if the government provides a subsidy to colleges of $6,000 per student per year, how many students will be accepted?

• A) 8 million per year
• B) 12 million per year
• C) 10 million per year
• D) 16 million per year

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