Answering Exams

If the home country government grants a subsidy on a domestically produced good domestic producers tend to ?

If the home country government grants a subsidy on a domestically produced good domestic producers tend to ?

A. Capture the entire subsidy in the form of higher profits
B. Increase their level of production (Correct)
C. reduce wages paid to domestic workers
D. consider the subsidy as a increase in production cost

 

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