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Suppose the government grants a $2000 subsidy for a Chrysler New Yorker, a stylish, large-bodied vehicle first produced decades ago.

Suppose the government grants a $2000 subsidy for a Chrysler New Yorker, a stylish, large-bodied vehicle first produced decades ago. If demand is more elastic than supply, then what can you say about the resulting change in the consumer price and the producer price?


  1. The consumer price increases by less than the producer price falls.
  2. The consumer price decreases by less than the producer price increases.
  3. The consumer price increases by more than the producer price falls.
  4. The consumer price decreases by more than the producer price increases.
  5. The consumer price falls by the same amount as the producer price rises.

Top Answer

The correct answer is 5.The consumer... View the full answer

3 comments
  • Very helpful explanation. Thank you!
    • sisnaz
    • Apr 05, 2018 at 2:33pm
  • Turns out the right answer was #5. Thanks anyway!
    • sisnaz
    • Apr 05, 2018 at 2:59pm
  • your welcome,my correct answer is also 5. 1 in this case refers to the question .Refer to the statement,The correct answer is 5
    • Jackyann
    • Apr 05, 2018 at 11:11pm

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