Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Decreased market demand
B
Increased production costs
C
Enhanced consumer choice
D
Improved product quality
Understanding the Answer
Let's break down why this is correct
Answer
Government subsidies help increase market supply by making it cheaper for producers to create goods and services. When the government gives money to businesses, they can produce more, which usually leads to lower prices for consumers. On the other hand, tax increases can decrease market supply because they make it more expensive for businesses to operate. When businesses have to pay more in taxes, they may produce less or raise their prices to cover the extra costs. For example, if a factory faces higher taxes, it might cut back on production, leading to fewer products available in the market.
Detailed Explanation
When taxes go up, businesses have to pay more money. Other options are incorrect because Some might think that higher taxes mean people will buy less; It might seem that taxes could help consumers by improving services.
Key Concepts
Government subsidies
Market supply and demand
Taxation effects
Topic
Government Subsidies and Market Effects
Difficulty
hard level question
Cognitive Level
understand
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