The more elastic the supply of a product, the more likely that the actual benefit of a subsidy granted of 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 supply is more elastic, sellers can easily adjust their quantity supplied in response to price changes. Therefore, the benefit of a subsidy is more likely to be passed on to buyers in the form of lower prices.

The More Elastic the Supply of a Product, the More