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

Question

Quizplus · Accepted Answer

A government subsidy lowers the cost of production or increases the revenue for producers, encouraging them to produce more of the subsidized good.

A Government Subsidy for a Good