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1.2.9 Indirect taxes and subsidies

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Question 14

Calculate the total daily commuter bus subsidy paid by the Nairobi city authority. You are advised to show your working.

A supply and demand graph for commuter bus trips in Nairobi showing the effect of a subsidy.

Quantity (million trips)Price (KES)Curve / Point
2.080Intersection of S and D (original equilibrium)
2.570Intersection of S1 and D (new consumer price)
2.595Point on original supply curve S (producer price)
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1.2.9 Indirect taxes and subsidies Questions

  1. A Level
  2. /Economics
  3. /1.2.9 Indirect taxes and subsidies