A government subsidy for a good
A) has no effect on the quantity of the good produced.
B) is similar to a tax insofar as it decreases the production of the good being subsidised.
C) punishes those who consume or produce the subsidised good.
D) increases production of the subsidised goods.

Question

Quizplus · Accepted Answer

A government subsidy for a good typically lowers the production cost for producers or decreases the price for consumers, encouraging more production and consumption of the subsidized good.

A Government Subsidy for a Good