The government subsidises electric vehicle purchases in Hong Kong. If demand is relatively elastic and supply is relatively inelastic, the subsidy benefit primarily goes to:

Question

Accepted Answer

B. With inelastic supply and elastic demand, producers capture most of the subsidy because they cannot easily expand output, while consumers are very price-sensitive.

The government subsidises electric vehicle purchases in Hong Kong. If demand is relatively elastic and supply is relatively inelastic, the subsidy benefit primarily goes to:

解說