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WAEC Economics 2015 Question 9

Question 9

Theory of Supply

Increase in production subsidies will shift

  1. A.the demand curve to the left.
  2. B.the supply curve to the right
  3. C.both the supply and demand curves to the left.
  4. D.the supply curve to the left and demand curve to the right.
Show the answer and explanation

Answer: B (the supply curve to the right)

Explanation

A subsidy lowers producers' costs, so supply increases (shifts right); demand is not directly affected.