-If the Government Pays a Per-Unit Subsidy to the Producer

question 154

Multiple Choice

-If the government pays a per-unit subsidy to the producer of a service, we would expect to see a(n) I. increase in the quantity demanded.
II) decrease in the out-of-pocket price paid by consumers.
III) increase in the quantity supplied by producers.

• A) I only
• B) both I and II only
• C) both II and III only
• D) I, II, and III

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