Advanced Placement (AP), 26.05.2021 14:40 evanlubbe53

The government of a small country is trying to encourage competition in the market for product X and offers a significant per-unit subsidy. However, it fails to incentivize an increase in competition. Which of the following could explain this scenario? a. The price elasticity of demand is very high.
b. A per-unit subsidy does not change output decisions.
c. No firm in the industry has market power.
d. The firms in the market are selling indistinguishable units of product X.
e. There are insurmountable barriers to entry into the market.

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