What Is One Disadvantage of Government Subsidies Over Price Controls

question 191

Multiple Choice

What is one disadvantage of government subsidies over price controls

• A)Subsidies cause disequilibrium in the market in which they are imposed.
• B)Subsidies require higher taxes.
• C)Subsidies cause lower prices to suppliers.
• D)Subsidies cause unemployment.

---

Definitions:

Units

In economics, units refer to the quantifiable measures used to express the quantity of an item, such as pieces, kilograms, liters, etc., used in transactions or production.

Total Cost

The complete cost of production, encompassing both fixed and variable costs, for a good or service.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; decreases as production increases.

Average Variable Cost

The per unit cost of variable inputs divided by the total quantity of output produced, reflecting the variable cost of production.