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Economics HL Demand and Supply Question


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Hi. I am currently working on a practice IA and needed some help.

For my IA, I have chosen an article that essentially talks about a fossil fuel rebate and how it should be removed. So far I have written that the fossil fuel industry causes negative externalities and the removal of these rebates would help reallocate resources for incentivizing more sustainable methods. I know that rebates are essentially subsidies given to consumers to increase consumption, however I am stuck on the diagram as I am confused on how rebates affect the diagram. Would you please help me?

Thanks in Advance

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