Create your own diagram of any one of the four market interventions listed below.
Here's what I want your graph to show:
I am taking the case of subsidy given by the government.
1) Original equilibrium occurs when demand = supply. At this point, price is P* and output is Y*.
2) Size of subsidy is (Ps - Pb).
3) Final market quantity rises from Y* till the point where dashed line touch X-axis.
4) Area of deadweight loss from subsidy is area of portion H.
Additional information you might want:
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