A per-unit government subsidy to producers of a good tends to
A)reduce the supply of the good.
B)increase the supply of the good.
C)shift the supply curve to the left.
D)not have any effect on the good's supply.

Question

Quizplus · Accepted Answer

A per-unit government subsidy to producers increases the effective price received by the producer, which can directly increase the producer surplus and result in an increase in the quantity supplied, leading to an increase in the supply of the good.

A Per-Unit Government Subsidy to Producers of a Good Tends