In the hybrid fee-subsidy scheme described in Figure 15.7, suppose there are two additional marginal savings functions,

Question:

In the hybrid fee-subsidy scheme described in Figure 15.7, suppose there are two additional marginal savings functions, one even higher than $\mathrm{MS}_{\mathrm{H}}$ and one lower than $M S_{1}$. In this case, graphically show the inefficiencies associated with a fee-subsidy system.

Figure 15.7

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