A Price Subsidy of 20 Cents Per Gallon on Milk

Multiple Choice

A price subsidy of 20 cents per gallon on milk (which does not have a perfectly inelastic demand curve) will result in a:

A) change in consumer tastes.
B) decrease in the equilibrium price of 20 cents per gallon.
C) decrease in the equilibrium price of less than 20 cents per gallon.
D) decrease in the equilibrium price of more than 20 cents per gallon.