A Subsidy Is Defined as

question 32

Multiple Choice

A subsidy is defined as

• A) a payment that must be made to the government whenever a good or service is sold.
• B) the number of trades that are eliminated from a market when a tax is imposed.
• C) the difference between total revenue and total cost for a business firm.
• D) a payment to either the buyer or seller of a good or service, usually on a per-unit basis, when a good or service is purchased.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output in a company, such as raw materials and labor expenses.

Total Cost

refers to the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Computer Software

Programs and operating information used by a computer to perform specific tasks.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs dilute over larger quantities of output.