A Subsidy Targeted to Raise Consumption by a Specific Amount

question 149

Multiple Choice

A subsidy targeted to raise consumption by a specific amount will cost the most when:

• A) both supply and demand are inelastic.
• B) supply is inelastic and demand is elastic.
• C) supply is elastic and demand is inelastic.
• D) both supply and demand are elastic.

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Definitions:

Assignment

The act of transferring rights, property, or responsibilities from one party to another, often seen in contexts of law, education, or business.

Communication-Intensive Profession

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