Is It Possible for Sellers to Benefit More Than Consumers

question 46

Multiple Choice

Is it possible for sellers to benefit more than consumers from a subsidy to buyers?

• A) Yes, if the sellers need it more.
• B) Yes, if the supply curve is relatively less elastic than the demand curve.
• C) Yes, if the supply curve is relatively more elastic than the demand curve.
• D) Producers can never benefit more than buyers from a subsidy to buyers.

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Definitions:

European Call

An option contract that allows the holder to buy the underlying asset at a specific price only on the expiration date.

American Option

A type of options contract that allows the holder to exercise the option at any time before and including its expiration date.

Expiration Date

The specified date on which an option, futures contract, or other derivative ceases to exist.

Right to Buy

An option giving the holder the ability to purchase an asset at a predetermined price within a specified timeframe.