Asked by
Daniel Fredman
on Nov 25, 2024Verified
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.Removing the subsidy placed on product X years ago will
A) decrease S, increase P, and decrease Q.
B) increase S, increase P, and increase Q.
C) decrease S, increase P, and increase Q.
D) increase D, decrease P, and increase Q.
Removing Subsidy
The process of eliminating financial support provided by governments to businesses, individuals, or other government departments.
Equilibrium Price
The price point at which the quantity of goods demanded equals the quantity of goods supplied, without any external intervention.
- Comprehend how government measures, including subsidies and price caps, influence market dynamics in terms of supply and demand.
Verified Answer
JB
Learning Objectives
- Comprehend how government measures, including subsidies and price caps, influence market dynamics in terms of supply and demand.
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