The more inelastic the demand for a product, the more likely that the actual benefit of a subsidy granted on the product will
A) go to sellers.
B) go to buyers.
C) go equally to both buyers and sellers.
D) do none of the above.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, so they are more likely to receive the benefit of a subsidy as the price decrease leads to a relatively smaller increase in quantity demanded.

The More Inelastic the Demand for a Product, the More