If a $300 subsidy is legally (statutorily) granted to the buyers of computers and as a result the selling price of computers rises by $200, the actual benefit of the subsidy
A) goes completely to the buyers of computers.
B) goes completely to the sellers of computers.
C) is $100 to computer buyers and $200 to computer sellers.
D) is $200 to computer buyers and $100 to computer sellers.

Question

Quizplus · Accepted Answer

The subsidy of $300 reduces the cost to buyers by $300, but the increase in selling price of $200 means that the actual benefit to buyers is only $100. The remaining $200 goes to sellers.

If a $300 Subsidy Is Legally (Statutorily) Granted to the Buyers