If instead of a per-unit subsidy, the government offered to pay for half the good's price, no matter the price:
A) the wedge method would no longer work.
B) instead of a parallel shift in demand, the subsidy should be modeled as a demand curve that is twice as steep.
C) demand would be perfectly elastic.
D) there would be no change in how we model the subsidy.
Correct Answer:
Verified
Q151: A subsidy causes deadweight loss:
A) only because
Q152: Which of the following statements is NOT
Q153: Use the following to answer questions:
Figure: Demand
Q154: Which one of the following statements about
Q155: Use the following to answer questions:
Figure: Supply
Q157: Which of the following statements is correct?
A)
Q158: When the supply of a good is
Q159: Which of the following statements is correct
Q160: A subsidy is:
A) similar to a reverse
Q161: Figure: Soda Market ![]()
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