The Fact That Price Subsidies Reduce Economic Surplus Implies That

question 95

Multiple Choice

The fact that price subsidies reduce economic surplus implies that:

• A)we can find an alternative policy that will make both the rich and the poor better off.
• B)price subsidies help the rich but not the poor.
• C)price subsidies are not effective at lowering prices.
• D)the quantity bought and sold in the market will fall.

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Definitions:

Price Promotion

A marketing strategy that temporarily reduces the price of a product or service to stimulate consumer purchasing.

Low Demand

A situation where the desire and need for certain products or services are beneath expectations, often leading to surplus inventory and reduced sales.

Slow Period

Times of low activity or demand in a business or industry, often marked by reduced sales or production.

Supply Chain

The entire system of producing and delivering a product or service, from the supplier of raw materials to the end user.