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In the market for college education, the governemtn decides to provide subsidies to those institutions providing...

In the market for college education, the governemtn decides to provide subsidies to those institutions providing college educations:

Supply _____

demand_____

Equilibrium price _____

Equlibrium quantity ____

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Answer #1

Answer.) The following graph indicate the effect of Government subsidies on the market of college education.

Note that Price is price of college education and Quantity is number of college students. Since the Government decides to provide subsidies to those institutions providing college educations, The overall cost providing college education decreases for such institutions providing college educations. Therefore, they find it more profitable to increase supply of college education.

The demand curve for college education remains the same and

the supply curve for college education shits to the right.

The equilibrium price of a college education decreases from P to P1 and

the equilibrium quantity increases Q to Q1

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