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When do producers benefit from an inelastic supply? When a tax is imposed when input costs increase when quotas are placed on goods when a subsidy is provided

Sagot :

When a subsidy is provided producers will benefit from an inelastic supply. When subsidy is provided to goods or services means price of good or services will decrease which will not decrease much percentage of supply due to which producers will get an advantage from an inelastic supply. This will be beneficial for both producer and consumer.

Supply is said to be inelastic when percentage change in supply is less than percentage change in price. For example - If price of milk increases by 20% and supply only decrease by 2%. This shows in spite of price of milk increased by huge amount but it does not bother it's supply to much. Some goods and services are inelastic in the market.

Read more about inelastic on brainly:-

https://brainly.com/question/28192591

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