To ensure that as many individuals as possible use seat belts, the government recently decided to subsidize the production of se

Question

3 years ago

8

To ensure that as many individuals as possible use seat belts, the government recently decided to subsidize the production of se

at belts.
Which of the following will happen as a result of this subsidy?
A. The demand curve for seat belts will increase.
B. The demand curve for seat belts will remain the same.
C. The demand curve for seat belts will shift to the left.
D. The supply curve for seat belts will shift to the left.
E. The supply curve for seat belts will shift to the right.

Business

1 answer:

olga_2 [115] · Answer 1 · 2022-07-26T16:56:42+03:00

Answer:

E. The supply curve for seat belts will shift to the right.

Explanation:

When a government establishes a subsidy, it is basically giving money to private people or businesses. In this case, the government's money should in crease the supply of seat belts by lowering their costs. This increase in the supply should shift the supply curve to the left and hopefully help to lower the price of seat belts (besides increasing the quantity supplied).