Which of the following is caused by a subsidy for buyers of a particular item?
(i) a leftward shift of the demand curve
(ii) an increase in quantity sold
(iii) a rightward shift of the demand curve
A)(i), (ii), and (iii)
B)(i) and (iii)
C)(ii) and (iii)
D)only (i)

Question

Quizplus · Accepted Answer

A subsidy for buyers of a particular item would lead to a decrease in the price of the item, making it more attractive to consumers. This would result in an increase in quantity sold (ii) and a rightward shift of the demand curve (iii) as more people are willing and able to buy the item at the lower price. There is no reason for a leftward shift of the demand curve (i) in this situation. Therefore, the best choice is (ii) and (iii), which is option C.

Which of the Following Is Caused by a Subsidy for Buyers