A private subsidy on a good
A)is similar to a tax because it decreases the production of the good being subsidized.
B)increases demand for the good.
C)punishes those who consume or produce the subsidized good.
D)has no effect on the quantity of the good produced.
E)increases production of that good.

Question

Quizplus · Accepted Answer

A private subsidy on a good lowers the cost of production or increases the revenue for producers, encouraging them to produce more, thus increasing the quantity of the good produced.

A Private Subsidy on a Good