Question

Question 7

Answer 1

If a subsidy of $6.00 per unit is granted to the producers of a product with a perfectly inelastic demand, the effect will be to: option D.

What is a subsidy?

A subsidy can be defined as an amount of money that is granted by the government or a public institution, so as to help a business firm (producers) keep the price of a product (commodity) or service low.

In this context, we can infer and logically deduce that the effect of a a subsidy of $6.00 per unit is granted to the producers of a product with a perfectly inelastic demand would lower the price of the product to consumers by $6.00 per unit.

Read more on subsidy here: brainly.com/question/6945210

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