Which of the Following Generalizations About the Benefit of a Subsidy

question 84

Multiple Choice

Which of the following generalizations about the benefit of a subsidy is correct?

• A) The more inelastic the supply of a product, the larger the portion of the benefit will be to buyers.
• B) The more inelastic the demand for a product, the larger the portion of the benefit will be to buyers.
• C) The more elastic the supply of a product, the smaller the portion of the benefit will be to buyers.
• D) The distribution of the benefit of a subsidy is not affected by the elasticity of the supply and demand for the product for which the subsidy is granted.

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