QUESTION IMAGE
Question
if the government gives a subsidy to the corn industry we would expect to see
a decreased demand of corn products
a decrease in the amount of corn planted
an increased demand for corn products
an increase in the amount of corn planted
A subsidy to the corn industry reduces the cost of production for corn - producers. This makes it more profitable for them to grow corn, so they will plant more corn. A subsidy does not directly affect the demand for corn products in a positive or negative way in the short - run as it is a supply - side factor.
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an increase in the amount of corn planted