-Refer to the Diagram Above

question 148

Multiple Choice

-Refer to the diagram above.If the price in this market is initially $7.00 and it is then allowed to move to the equilibrium,does the quantity supplied increase or decrease,and by how much?

• A) The quantity supplied decreases by 40 units.
• B) The quantity supplied decreases by 20 units.
• C) The quantity supplied remains unchanged.
• D) The quantity supplied increases by 20 units.
• E) The quantity supplied increases by 40 units.

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Definitions:

Government Subsidies

Financial support provided by the government to firms, individuals, or other governmental bodies, often aimed at promoting economic and social policies.

Production Process

The sequence of operations or activities involved in converting inputs into finished goods or services.

Business Enterprise

An organization engaged in commercial, industrial, or professional activities, aiming to generate profits.