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A new per unit subsidy for hybrid car production increases the supply of hybrid cars. If hybrid cars are elastically demanded, what will happen to total revenues from hybrid car production?

Respuesta :

Answer:

A) They will rise.

Explanation:

In case when the demand for hybrid cars are in elastic so here the total revenue should be rises as due to the subsidy, the price would decline and the supply rises this results there is a rise in demand that shows elastic so the demand rise at high percentage as compared to decline percentage with respect to the level of price

Due to this, the revenue would increase

Hence, the correct option is A.

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