Question

The government provides a per book subsidy to companies producing physical copies of textbooks. What is the purpose of this subsidy?

1) To encourage the production of physical textbooks
2) To discourage the production of physical textbooks
3) To promote the use of digital textbooks
4) To reduce the cost of textbooks for students

Answer 1

The government provides a per book subsidy to companies to encourage the production of physical textbooks and to make textbooks more affordable for students by reducing production costs.

Step-by-step explanation:

The purpose of a per book subsidy provided by the government to companies producing physical copies of textbooks is to reduce the cost of production for these firms, which has the effect of increasing supply at every given price. This shifts the supply curve to the right, and is typically done to achieve certain policy objectives. In this case, the most likely goals are to encourage the production of physical textbooks and to reduce the cost of textbooks for students, making them more affordable and thus, more accessible.