132k views
5 votes
What is the government's goal when providing a company with a subsidy?

a) the government only provides subsidies to poor people.
b) to manage the control of dangerous products entering the marketplace
c) to increase their supply
d ) to manage their supply

1 Answer

4 votes

Answer:

c) to increase their supply

Step-by-step explanation:

A subsidy is an incentive or motivation from the government to private businesses or individuals. Subsidies are usually in the form of cash, tax breaks, loans, or grants. The government gives subsidies to support production in the sector it wishes to promote.

Subsidies lower the cost of production to the business. Consequently, an entity increases its production quantities and can supply the market at lower prices. Subsidies, therefore, increase supplies in the market at friendly prices.

User Ravi Kumar Gupta
by
4.4k points