If the home government subsidises a domestically produced good, how do domestic producers tend to respond?

1. A Option A: Reduce wages paid to domestic workers
2. B Option B: Treat the subsidy as an increase in production cost
3. C Option C: Increase their level of production
4. D Option D: Capture the entire subsidy in the form of higher profits

Answer checked 11 October 2026 · How we write and check questions