Dual Shifts in Supply and Demand Curves

Steps:

• Subsidy to producers lowers costs, shifting supply curve rightward.
• Higher prices of alternatives increase demand for solar energy, shifting demand curve rightward.
• New equilibrium occurs at intersection of shifted supply and demand curves.
• This results in higher equilibrium quantity; price change is indeterminate without diagram specifics.

Why B is correct:

• B marks the intersection after both rightward shifts, per law of supply and demand.

Why the others are wrong:

• A: Reflects only supply shift (ignores demand increase).
• C: Suggests leftward shift (contradicts both policy effects).
• D: Indicates no change or opposite movement (ignores subsidies and substitutes).

Final answer: B