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A-Level Economics · Subsidy diagram question

Which area is CONSUMER SURPLUS AFTER the subsidy?

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The diagram

The answer

The triangle N C E. Below D, above the NEW price £3, out to quantity 7 — bigger than before on both dimensions. After the subsidy consumers pay £3 and buy 7: CS = area NCE. Compare NBG before — the growth in CS is one of your 3–4 talking points on this diagram.

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This is one of 5 questions on the subsidy diagram — every corner lettered, every wrong answer diagnosed.

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