Multiple Choice
Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad.The export revenue of these firms would rise if the foreign demand is
A) elastic in response to the price reduction.
B) inelastic in response to the price reduction.
C) unit elastic in response to the price reduction.
D) weak.
Correct Answer:
Verified
Correct Answer:
Verified
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