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Econ mc ~easy~

Suppose the government gives out subsidies to Good X. The producers share no part of the subsidy benefits if

A. the demand for Good X is perfectly elastic

B. the demand for Good X is perfectly inelastic

C. the supply of Good X is perfectly elastic

D. the supply of Good X is perfectly inelastic

Why ans 唔可以係C ge ??

1 個解答

評分
  • 1 十年前
    最愛解答

    First, the government gives out subsidies to good x, so the supply of good x will increase as the cost of production will fall. thus, C and D must not be the correcr answer.

    The answer should be B. If the demand is PERFECTLY INELASTIC, the consumers will enjoy the whole susidy benefit. And the price of good x will fall.

    Answer A is wrong, if the demand is perfectly elastic, the producers will enjoy the whole subsidy benefit. The price will remain unchanged.

    資料來源: myself
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