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soldi70 [24.7K]
3 years ago
8

1. If the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and

a decrease in the equilibrium quantity. true or false
Business
1 answer:
Crazy boy [7]3 years ago
7 0

Answer: False

Explanation:

When the government subsidies production of a good, it leads to a rise in the supply of the good. The supply curve shifts down to the right leading to a <em>fall in the price level</em>. But the <em>equilibrium quantity increases</em>.

Thus, the given statement is false that if the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and a decrease in the equilibrium quantity.

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