Subsidy Increases Steel Output and Sales Revenue

Steps:

• Subsidy of W per tonne shifts supply curve right, lowering equilibrium price to OP.
• Equilibrium quantity rises to OQ due to increased production incentive.
• Consumer price is OP, while producers receive OP + W.
• Sales value equals new market price times new quantity: OP × OQ.

Why B is correct:

• Sales revenue formula is equilibrium price multiplied by equilibrium quantity.

Why the others are wrong:

• A: OP OQ implies addition, not the multiplication needed for total revenue.
• C: W - OQ subtracts quantity from subsidy rate, yielding no economic sense for sales.
• D: W x OQ calculates total subsidy expenditure, not market sales value.

Final answer: B