if-a-subsidy-of-2-per-unit-is-introduced-in-a-market-how-does-it-affect-the-equi

Question

If a subsidy of $2 per unit is introduced in a market, how does it affect the equilibrium quantity?

Accepted Answer

The equilibrium quantity increases.

Answer

The equilibrium quantity decreases.

Answer

The equilibrium quantity remains unchanged.

Answer

The equilibrium quantity becomes zero.

If a subsidy of \$2 per unit is introduced in a market, how does it affect the equilibrium quantity?