When a Government Subsidy Is Granted to the Buyers of a Product

question 178

Multiple Choice

When a government subsidy is granted to the buyers of a product, sellers can end up capturing some of the benefit because

• A) the market price of the product will fall in response to the subsidy.
• B) the market price of the product will rise in response to the subsidy.
• C) the market price of the product will not change in response to the subsidy.
• D) producers will reduce the supply of the product.

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Definitions:

Drawings of People

A projective psychological test or method where individuals express their emotions, desires, and internal conflicts through doodles or structured images of humans.

Type of Test

A classification for tests based on their purpose, structure, or content, such as personality assessments or intelligence tests.

Prospective Buyers

Potential customers who have shown interest in a product or service but have not yet made a purchase.

Customized Interactions

Personalized exchanges between a business and its customers, tailored to meet the individual needs or preferences of the customer.