Limited access

Upgrade to access all content for this subject

The graph below shows the market for fire protection services in the village of Mapleton, which are provided by a private company on a subscription basis to households which pay an annual fee.

Currently, the market for fire protection services includes benefits to those who do not pay for them. Suppose that the Mapleton Village Council provides a subsidy to the company sufficient to achieve an efficient level of fire protection services. Which of the following best represents the price and quantity of services that would be produced?

A

P0 and Q4.

B

P1 and Q3.

C

P2 and Q2.

D

P0 and Q2.

E

P1 and Q1.

Select an assignment template