Question
Subsidies are payment by government to
Answer: Option C
Answer: (c)
A subsidy is essentially a payment by the government to suppliers/producers that reduce their costs of production and encourages them to increase output.
Examples include a guaranteed payment on the factor cost of a product –
e.g. a guaranteed minimum price offered to farmers; an input subsidy that subsidizes the cost of inputs used in production, etc. However, subsidies can be given to consuming units as well. Either way, it benefits the end-user or consumer.
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Answer: (c)
A subsidy is essentially a payment by the government to suppliers/producers that reduce their costs of production and encourages them to increase output.
Examples include a guaranteed payment on the factor cost of a product –
e.g. a guaranteed minimum price offered to farmers; an input subsidy that subsidizes the cost of inputs used in production, etc. However, subsidies can be given to consuming units as well. Either way, it benefits the end-user or consumer.
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