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WAEC Agricultural Science 2004 Question 55

Question 55

Basic Agricultural Economics

In the event of increased government subsidies, the farmer's production cost

  1. A.falls, hence supply increases
  2. B.falls, hence supply decreases
  3. C.rises, hence supply increases
  4. D.rises, hence supply decreases
Show the answer and explanation

Answer: A (falls, hence supply increases)

Explanation

Subsidies cut costs, so farmers produce and supply more.