A government gives manufacturers of solar panels a payment for each unit they produce. Which outcome is most likely?
The cost of supplying each panel rises and the market price rises.
The cost of supplying each panel falls and the market price falls.
The cost of supplying each panel is unchanged and the market price falls.
The cost of supplying each panel falls and the market price rises.
127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.