A government subsidy to the producers of a product

A) reduces product supply.
B) increases product supply.
C) reduces product demand.
D) increases product demand.

Question

A government subsidy to the producers of a productA) reduces product supply.B) increases product supply.C) reduces product demand.D) increases product demand.

Karen Paleno · Accepted Answer

Final Answer : B, Explanation :  When the government provides a subsidy to producers, it essentially reduces their costs of production. This allows them to increase their supply of the product to the market as they can now produce goods at a lower cost. Thus, the subsidy increases the product supply.

A government subsidy to the producers of a product

A) reduces product supply.
B) increases product supply.
C) reduces product demand.
D) increases product demand.

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Learning Objectives

Learning Objectives

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