Does a Subsidy to Sellers Affect the Demand Curve

question 103

Multiple Choice

Does a subsidy to sellers affect the demand curve?

• A) Yes; the demand curve shifts up by the amount of the subsidy.
• B) Yes; the demand curve shifts to the right by the amount of the subsidy.
• C) No; the demand curve does not move, as quantity demanded increases instead.
• D) No; the demand curve does not move, as quantity demanded decreases instead.

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Definitions:

Unearned Revenue

Money received by a company for goods or services yet to be delivered or performed, representing a liability until the obligation is fulfilled.

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