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What is a subsidy?
A subsidy is a payment from the government to a firm to encourage greater output and lower price to increase consumption.
What does a Demand curve show?
Price changes cause quantity to change
What does the SLOPE of the demand curve show?
Price elasticity of demand measures the change of quantity demanded after a change in price
Inelastic
Consumers will still buy the product regardless of the price change
Elastic
Consumers will stop buying the product and get an alternative if the price changes
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