In What Way Is the Result of a Subsidy Given

question 49

Multiple Choice

In what way is the result of a subsidy given to either demanders or suppliers similar to the result of a price ceiling?

• A) The amount that consumers pay for the good will be less than they previously paid
• B) The amount of the good that will be traded in the market will be less than previously traded
• C) both price ceilings and subsidies create excess demand
• D) The amount that consumers pay for the good will be greater than they previously paid
• E) both price floors and excise taxes create excess supply