An increase in a per unit production subsidy ______ supply.
A) increases
B) decreases
C) does not change
D) changes in an indeterminate direction

Question

Quizplus · Accepted Answer

An increase in a per unit production subsidy would decrease the cost of production for the producer, resulting in an increase in the quantity supplied. This means that the producer will be willing and able to supply more of the product at each price level, resulting in an increase in supply.

An Increase in a Per Unit Production Subsidy ______ Supply