Economics (AS & A Level) · Feb / March 2022 · Paper 12 · Question 18

The bus fare in a rural area is $5 per journey. The government decides to improve local transport by giving bus firms a subsidy of $2 per journey. The diagram shows the possible changes in demand and supply. What is the new quantity of journeys and the bus fare for a journey?

1. Aquantity of journeys: 950, bus fare ($): 3
2. Bquantity of journeys: 950, bus fare ($): 7
3. Cquantity of journeys: 1050, bus fare ($): 4
4. Dquantity of journeys: 1050, bus fare ($): 6

As printed in the paper