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corie corie
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6 years ago
Why is there a deadweight loss associated with subsidy payments?
A) There is no deadweight loss from a subsidy.
B) Quantity supplied is less than the equilibrium amount, so consumers and producers lose surplus value on those units that are no longer produced.
C) Quantity supplied exceeds the equilibrium amount, and consumer willingness to pay for these additional units is smaller than the marginal cost of producing them.
D) The subsidy payment does not distort quantities in the market, but the government cost exceeds consumer willingness to pay for the quantity demanded.
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
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oracledarrenoracledarren
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#1
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6 years ago
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corie Author
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6 years ago
Thanks
Tim0301
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
elizabetheldrid
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2 hours ago
Helped a lot
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