. Price and cost (housands of dolars) The graph shows the demand for trade schoo

Question

. Price and cost (housands of dolars) The graph shows the demand for trade school education The marginal cost of trade school education is $6,000 a year and the marginal exdernal benefit is $2,000 per student per year Suppose the government provides a subsidy that achieves the efficient number of students in private trade schools What is the subsidy that will achieve the officient number of students enrolled? The bsidy that achieves te eticent rumber of shdentsaS >> Ramember that the price given on the y axs i S-MC s in thousands of dollars D-MB Enver your answer in he answer box TV F12 ScoP Prt Sc by R Lock Break

Explanation / Answer

Subsidy should be 2000 per student.

Subsidy should be equal to marginal external benefit. By doing this government reduces cost of per unit production by 2000. This leads to school supply more education. Thus output increases to efficient level.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.