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1.8 The market mechanism, market failure and government intervention in markets

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Question 22

Extract E states: 'To accelerate the transition to low-carbon heating, the government has introduced a direct unit subsidy for certified installers of residential air-source heat pumps.'

Draw a supply and demand diagram to show the effects on the market for residential air-source heat pumps of the government providing this subsidy. The total amount of government spending on the subsidy should be labelled clearly.

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1.8 The market mechanism, market failure and government intervention in markets Questions

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets