Asked by

Kaveen Sivanesan
on Dec 04, 2024

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The benefit of a subsidy accrues mostly to consumers:

A) in every instance.
B) if Ed/Es is large.
C) if Ed/Es is small.
D) if Ed and Es are equal.
E) in no instance.

Subsidy

A benefit given by the government to groups or individuals, usually in the form of a cash payment or tax reduction, to remove some type of burden and is considered to be in the interest of the public.

Consumers

Individuals or entities that purchase goods or services for personal use and not for manufacturing or resale.

Ed/Es

This represents the ratio of the elasticity of demand (Ed) to the elasticity of supply (Es), indicating how responsive the quantity demanded and supplied are to changes in price.

  • Investigate how government regulations, including subsidies, production quotas, and targeted taxes, influence market dynamics.
  • Elucidate the effects of elasticity on the distribution of tax burdens and market results.
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Bruno MariscottiDec 06, 2024
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