Total Revenue with Subsidy in Economic Diagrams

Steps:

• Identify the market price and quantity produced under subsidy conditions.
• Calculate standard revenue as price multiplied by quantity, represented by the rectangle from origin to price and quantity axes.
• Add the subsidy area, typically a rectangle or trapezoid above the price up to the subsidy-inclusive level.
• Combine both areas to find total revenue including subsidy payments.

Why D is correct:

• OGHM represents the full rectangle of price times quantity plus the subsidy wedge, per the revenue formula TR = P × Q + subsidy.

Why the others are wrong:

• A. EGHK shows only producer surplus, not full revenue.
• B. OEKM captures costs or a partial area excluding subsidy.
• C. OJL is just unsubsidized revenue without the added subsidy component.

Final answer: D