A government subsidy to the producers of a product

Name: A government subsidy to the producers of a product
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the government provides a subsidy to the producers of a product, it reduces the cost of production for the manufacturers. This leads to an increase in the profitability of the industry, and hence encourages increased production. As a result, the supply of the product in the market increases, which keeps the prices in check, and consumers benefit from lower prices.

A Government Subsidy to the Producers of a Product