A Subsidy on a Product Will Generate More Actual Benefit

question 239

Multiple Choice

A subsidy on a product will generate more actual benefit for producers (and less for consumers) when

• A) the supply of the product is relatively inelastic.
• B) the supply of the product is relatively elastic.
• C) the demand for the product is relatively inelastic.
• D) either b or c is true

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Definitions:

Twice

Occurring two times; indicating the occurrence of something two times.

Eu-

A prefix meaning good, well, or true, often used in scientific and medical terms.

Good

A term that denotes something with desirable qualities, beneficial, or morally right.

Normal

Conforming to a standard or typical value, condition, or behavior considered usual or expected.