Economics (AS & A Level) · May / June 2022 · Paper 12 · Question 16

To improve the air quality for its citizens, a government introduces a subsidy for the producers of cars powered by batteries charged from the electricity supply. What are the likely effects of this subsidy on the price and sales of electricity?

1. Aprice of electricity falls; sales of electricity falls
2. Bprice of electricity falls; sales of electricity rises
3. Cprice of electricity rises; sales of electricity falls
4. Dprice of electricity rises; sales of electricity rises

As printed in the paper