A subsidy to carrot farmers will
A)increase the quantity of carrots demanded.
B)decrease the quantity of carrots supplied.
C)increase the supply of carrots.
D)leave both the supply and demand of carrots unchanged.

Question

Quizplus · Accepted Answer

A subsidy to carrot farmers will lower their production costs, which will increase the supply of carrots. As a result, the price of carrots will decrease, leading to an increase in quantity demanded. Therefore, the subsidy will not decrease the quantity supplied or leave both the supply and demand of carrots unchanged.

A Subsidy to Carrot Farmers Will