Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

Which statement correctly describes a production subsidy?

  • AIt causes demand for the good to increase so the demand curve shifts to the right.
  • BIt enables firms to supply more so the supply curve shifts to the left.
  • CIt is financial assistance to firms from the government to help increase output.
  • DIt is money taken from firms by the government to reduce harmful side effects of production.

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