If the government stops subsidy on cocoa production, the supply curve of cocoa will
ECONOMICS
WAEC 2023
If the government stops subsidy on cocoa production, the supply curve of cocoa will
- A. become vertical
- B. remain unchanged
- C. shift to the left
- D. shift to the right
Correct Answer: C. shift to the left
Explanation
If the government stops subsidy on cocoa production, the supply curve of cocoa will shift to the left. This is because the subsidy was making it cheaper to produce cocoa, so when the subsidy is removed, the cost of production will increase. As a result, fewer cocoa beans will be supplied at any given price.
Post an Explanation Or Report an Error
If you see any wrong question or answer, please leave a comment below and we'll take a look. If you doubt why the selected answer is correct or need additional more details? Please drop a comment or Contact us directly. Your email address will not be published. Required fields are marked *