Home » Classroom » WAEC Economics 2015 Question

increase in production subsidies will shift - WAEC Economics 2015 Question

increase in production subsidies will shift 

A
the demand curve to the left
B
the supply curve to the right
C
both the supply demand curves to the left
D
supply curve to the left and demand curve to the right
correct option: b

Subsidy impact. Marginal subsidies on production will shift the supply curve to the right until the vertical distance between the two supply curves is equal to the per unit subsidy; when other things remain equal, this will decrease price paid by the consumers (which is equal to the new market price) and increase the price received by the producers.

Please share this, thanks:

Add your answer

Notice: Posting irresponsibily can get your account banned!

No responses