Second drop down options are: More Likely Less Likely Equally Likely Canada subs

Question

Second drop down options are:

More Likely

Less Likely

Equally Likely

Canada subsidizes Canadian magazines to offset the invasion of foreign (primarily U.S.) magazines, which take 90% of the county's sales. The Canada Magazine Fund provides a lump-sum subsidy to various magazines to maintain a Canadian presence against the overwhelming presence of foreign magazines." Eligibility is based on high levels of investment in Canadian editorial content and reliance on advertising revenues. What effect will a lump-sum subsidy have on the number of subscriptions sold? With the lump-sum subsidy. Canadian magazines will produce 1 and will be I to shut down. less output the same amount of output

Explanation / Answer

1) more output

2) less likely

When Canada Magazine Fund provide funds to firms then firms are able to produce more output in the economy and as there cost of production declines due to subsidy, they are less likely to shut down their production.

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