If the government stops subsidy on cocoa production, the ...
If the government stops subsidy on cocoa production, the supply curve of cocoa will
Become vertical
Remain unchanged
Shift to the left
Shift to the right
Correct answer is C
If the government stops subsidy on cocoa production, the supply curve of cocoa will shift to the left. This is because the subsidy was making it cheaper to produce cocoa, so when the subsidy is removed, the cost of production will increase. As a result, fewer cocoa beans will be supplied at any given price.
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