asked 170k views
3 votes
Suppose the government increases subsidies for wheat farmers who grow the wheat that goes into hamburger buns.

asked
User Gulliver
by
7.9k points

1 Answer

2 votes

Answer:

An increase in subsidy for wheat by the government will reduce the cost of producing wheat by the farmers. As a result, the cost of producing a hamburger buns will also reduce. This will mean that there will a decrease in cost of producing a hamburger. Hence, the hamburger will be sold at a cheaper price due to which it will increase in supply. Such strategies can be very beneficial for the farmers as well as the restaurants which sell hamburgers.

answered
User Rob Reagan
by
8.0k points
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