Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A fixed amount of money given for each unit of a good produced
B
A tax imposed on each unit sold
C
A price increase for goods sold
D
A grant provided to consumers for purchasing a product
Understanding the Answer
Let's break down why this is correct
Answer
A per unit subsidy in economics is a payment that the government provides to producers for each unit of a good or service they produce or sell. This means that for every item made, the producer receives extra money from the government, which helps lower their costs. For example, if a farmer receives a $2 subsidy for each bushel of corn they sell, this money can encourage them to produce more corn because it increases their profit. By making it cheaper to produce goods, per unit subsidies can lead to lower prices for consumers and can help increase the overall supply of that product in the market. Overall, these subsidies aim to support certain industries and stimulate economic activity.
Detailed Explanation
A per unit subsidy is money given for each item made. Other options are incorrect because Some might think a tax is like a subsidy; A price increase means you pay more for goods.
Key Concepts
per unit subsidy
Topic
Per Unit Subsidies in Economics
Difficulty
easy level question
Cognitive Level
understand
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