The Benefit of a Subsidy Will Go Primarily to Sellers

question 154

Multiple Choice

The benefit of a subsidy will go primarily to sellers when the

• A) demand for the product is highly inelastic and supply is relatively elastic.
• B) demand for the product is highly elastic and the supply is relatively inelastic.
• C) subsidy is legally (statutorily) granted to the seller of the product.
• D) subsidy is legally (statutorily) granted to the buyer of the product.

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Definitions:

Vertical Acquisition

The purchase of a company that operates within the same industry but at a different level of the supply chain.

Horizontal Acquisition

The process of a company acquiring another company in the same industry to increase its market share.

Hostile Takeover

An acquisition attempt by a company or individual against the wishes of the target company's management and board of directors.

Amalgamation

The merger or consolidation of two or more companies into a new entity, combining their assets, liabilities, and operations.