In what way is the result of a subsidy given to either demanders or suppliers similar to the result of a price ceiling?
A) The amount that consumers pay for the good will be less than they previously paid
B) The amount of the good that will be traded in the market will be less than previously traded
C) both price ceilings and subsidies create excess demand
D) The amount that consumers pay for the good will be greater than they previously paid
E) both price floors and excise taxes create excess supply

Question

Quizplus · Accepted Answer

A subsidy reduces the effective price paid by consumers, similar to a price ceiling, which also lowers the price consumers pay.

In What Way Is the Result of a Subsidy Given