3rd attempt See Hint A new report has shown that smoke detectors reduce the deat

Question

3rd attempt See Hint A new report has shown that smoke detectors reduce the death rate from fires. To ensure that as many individuals as possible use smoke detectors, the government recently decided to subsidize the production of smoke detectors. Which of the following will happen as a result of this subsidy? Choose one or more: O A. The demand curve for smoke detectors will shift to the left. B. The supply curve for smoke detectors will shift to the left. C. The demand curve for smoke detectors will increase. D. The supply curve for smoke detectors will shift to the right. E. The demand curve for smoke detectors will remain the same.

Explanation / Answer

Answer : As a result of government subsidy the supply curve of the smoke dectors has been shift to the right where as demand curve for smoke dectors has been increased. It will lead to lower price and higher quantity demanded for the smoke dectors. The effect of the subsidy is that they shift the supply curve to the right. It leads to lower market price and higher quantity demanded. The quantity demanded by the consumer has been increased where the price of the smoke dector has been fall in the market.

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