The Introduction of a Subsidy in a Perfectly Competitive Marketplace

question 201

True/False

The introduction of a subsidy in a perfectly competitive marketplace that is originally in equilibrium will raise total surplus.

---

Definitions:

Earned

Income, benefits, or rights obtained as a result of work or contribution.

Invoice

A document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided.

Credit Purchase

The acquisition of goods or services with an agreement to pay later, usually within an agreed period.

Recorded

The act of entering financial transactions into the accounting records of a business.