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1.2 How markets work

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Question 21

Annotate the diagram below to show the effect of removing a government subsidy for home loft insulation on the market equilibrium price and quantity.

A demand and supply diagram representing the market for home loft insulation. The vertical axis is labeled 'Price (£)' and the horizontal axis is labeled 'Quantity'. A downward-sloping demand curve is labeled 'D'. An upward-sloping supply curve representing the initial subsidized state is labeled 'S1'. The curves intersect at an equilibrium point, with dashed lines leading to 'P1' on the vertical axis and 'Q1' on the horizontal axis. The origin is marked '0'.

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1.2 How markets work Questions

  1. A Level
  2. /Economics
  3. /1.2 How markets work