Question

All else held constant, if farmers receive a subsidy for their corn, then this would cause a rev: 05_02_2018 Multiple Choice movement down along the current supply curve of corn. rightward shift in the current supply of corn. leftward shift in the current supply of corn. movement up along the current supply curve of corn.

Answer 1

Answer:

rightward shift in the current supply of corn. 

Explanation:

A subsidy is when the government pays individuals or firms either directly through cash payment or indirectly through a targeted tax cut. Subsidy is granted by the government to promote a certain desirable economic or social activity .

If subsidy are given to farmers, their cost of production falls and production and supply increases as a result. This shifts the supply curve to the right.

It is only a change in price of corn that would lead to a movement along the supply curve of corn.

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