Subsidy to Suppliers Shifts Supply Curve Right

Steps:

• Identify initial equilibrium at quantity Q1 with market price between P1 and P2.
• To reach Q2 > Q1, shift supply curve rightward via supplier subsidy, lowering effective costs.
• Evaluate options: minimum price raises price and reduces quantity; consumer subsidy shifts demand but may not match Q2 precisely.
• Match subsidy amount: P1 per test to opticians achieves exact shift to Q2.

Why D is correct:

• Subsidy to suppliers lowers marginal cost by P1, shifting supply right by vertical distance P1, increasing equilibrium quantity to Q2 per supply-demand model.

Why the others are wrong:

• A: Minimum price at P1 floors price above equilibrium, creating surplus and reducing quantity below Q1.
• B: Unspecified recipient (likely consumers) shifts demand right but by unclear amount, not guaranteeing Q2.
• C: Subsidy of P2 to opticians shifts supply too far right, exceeding Q2.

Final answer: D