Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicdes (EVs) seem to be mare emvironmentally friendly than gasoline fueled vehicles The Canadian govermment has bean encouraging Canadians to purchase EVs by offering consumers some subsidies Because you can muli task, your boss at Aeon Insights has assigned you to analyze three diferent palides Your first tsk is this EV subsidy policy asesament. From published studies, you know the following information Demand for EVs P= 100,00 - 5000 Supply of EVs P= 40.000 + 5000 Positive extarnality. At S10.000per EV because of the expected cut in carbon dioxide emission To haip visualize the situation, you constructed Figure 1 balow to axamine Questions #1, 42. 43 and #4 Ded Figue tlie Vatide Suidy Policy #1: The govermment does not intervene. Before any govermment intervention, the social surplus (SS) is equal to. Oa. S2.400.000 Ob. 51.800.000 Oe $2,100.000 Od $5,700,000 Policy #3: Limiting Subsidy to Lower income Households You reviewed the literature on subsidies and you fournd that about 60% of all subsidy expenditures go to the higher income households, such as those in the top 20% income bracket. These "vidr households would have bought the subsidized product or service even in the absence of such subsides. In the market for EVs, this means the "rich" households would have paid the price associated with Deg even with no subsidy In light of this finding. you want to subsidize only the households that would not purchase EVs in the absence of this $10.000 subsidy at the DEe price. This limited or selective subsidy targets lower income households and the quantity of EVs that require subsidy will fal ou notice that this selection is possible if you offer the S10.000 subsidy based on income tax T4 returns. Existing research suggests that the higher is the income of the households, the higher is the marginal willingness to pay You befeve that this abo applies to the demand for EVs With this scaled down EV subsidy program, the SS is equal to Oa $2 450,000 Ob. $1.950.000 Oe $1.750.000 O4 $1.825,00 Request the answers to these 2 questions.
Canada: Electric Vehicle Subsidy Program Even though controversial, electric vehicdes (EVs) seem to be mare emvironmentally friendly than gasoline fueled vehicles The Canadian govermment has bean encouraging Canadians to purchase EVs by offering consumers some subsidies Because you can muli task, your boss at Aeon Insights has assigned you to analyze three diferent palides Your first tsk is this EV subsidy policy asesament. From published studies, you know the following information Demand for EVs P= 100,00 - 5000 Supply of EVs P= 40.000 + 5000 Positive extarnality. At S10.000per EV because of the expected cut in carbon dioxide emission To haip visualize the situation, you constructed Figure 1 balow to axamine Questions #1, 42. 43 and #4 Ded Figue tlie Vatide Suidy Policy #1: The govermment does not intervene. Before any govermment intervention, the social surplus (SS) is equal to. Oa. S2.400.000 Ob. 51.800.000 Oe $2,100.000 Od $5,700,000 Policy #3: Limiting Subsidy to Lower income Households You reviewed the literature on subsidies and you fournd that about 60% of all subsidy expenditures go to the higher income households, such as those in the top 20% income bracket. These "vidr households would have bought the subsidized product or service even in the absence of such subsides. In the market for EVs, this means the "rich" households would have paid the price associated with Deg even with no subsidy In light of this finding. you want to subsidize only the households that would not purchase EVs in the absence of this $10.000 subsidy at the DEe price. This limited or selective subsidy targets lower income households and the quantity of EVs that require subsidy will fal ou notice that this selection is possible if you offer the S10.000 subsidy based on income tax T4 returns. Existing research suggests that the higher is the income of the households, the higher is the marginal willingness to pay You befeve that this abo applies to the demand for EVs With this scaled down EV subsidy program, the SS is equal to Oa $2 450,000 Ob. $1.950.000 Oe $1.750.000 O4 $1.825,00 Request the answers to these 2 questions.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 11E: Federal excise taxes on gasoline vary widely across the developed world. The United States has the...
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