If a subsidy (going to producers)is created for a good this would

Question

Quizplus · Accepted Answer

A subsidy given to producers will reduce their costs of production, which will result in an increase in the quantity supplied at every price level. This will cause a shift in the supply curve to the right (i.e., an increase in supply). As a result of the subsidy, producers will be willing to supply more of the good at every price level, which will lead to a drop in the equilibrium price and an increase in the equilibrium quantity.

If a Subsidy (Going to Producers)is Created for a Good