Question

Suppose the country government sends each parent a coupon that can be used to subsidize the cost of sending each child to daycare. What would you expect to occur in the market for daycare services?:

a) An increase in the price of daycare services
b) A decrease in the demand for daycare services
c) An increase in the supply of daycare services
d) A decrease in the price of daycare services

Answer 1

If the country government sends each parent a coupon to subsidize the cost of sending each child to daycare, it would lead to an increase in the demand for daycare services, resulting in a decrease in the price of daycare services.

Step-by-step explanation:

In the market for daycare services, if the country government sends each parent a coupon to subsidize the cost, it would lead to an increase in the demand for daycare services. Since parents now have access to coupons that reduce the cost of daycare, they would be more likely to enroll their children, resulting in an increased demand. As a result, the correct answer would be:

b) A decrease in the price of daycare services