Answered

Explore Westonci.ca, the top Q&A platform where your questions are answered by professionals and enthusiasts alike. Explore our Q&A platform to find reliable answers from a wide range of experts in different fields. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

The u. S. Government has subsidized ethanol production since 1978. With the advent of affordable electric cars, policymakers are considering whether to allow the subsidy to expire. The accompanying graph represents the market for ethanol. Move the supply and/or demand curves to show how reducing the subsidy will affect the ethanol market.

Sagot :

When the subsidy is reduced, the supply curve would shift to the left.

What is a subsidy?

A subsidy is when the government reduces the cost of an item or reduces the cost of production of an item. The aim is to encourage the production or consumption of the item,

What is the impact of a reduction in subsidy?

When the subsidy is reduced, the cost of producing ethanol would increase. This would discourage producers. As a result, there would be a reduction in supply of ethanol. The supply curve would shift to the left. The equilibrium price would increase and equilibrium quantity would decrease.

Please check the attached image for the diagram. To learn more about the change in supply, please check: https://brainly.com/question/15835771

View image ewomazinoade
We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.