A. The world price increased from $4 to $7
B. The domestic quantity supplied increased from 200 000 to 400 000 units
C. The quantity of imports decreased from 500 000 to 300 000 units
D. The domestic quantity demanded remains unchanged
参考答案:
A
本题详细解析:
A
Explanation:
After granting the subsidy, the world price remains the same, but the price domestic producers receive increases. This means that consumers continue to pay $4 but the government grants an additional $3 to domestic producers for every unit sold. Therefore option A is false.
Options B, C, and D are true because a subsidy does encourage production and so domestic quantity supplied increases while quantity of imports decreases. Also, domestic quantity demanded remains unchanged because the price consumers pay remains the same.
