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The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and
- The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and _________ the equilibrium quantity, whereas when the government places a subsidy on a good, it _________ the equilibrium price and _________ the equilibrium quantity.
a. increases; decreases; decreases; increases
b. increases; increases; decreases; decreases
c. decreases; decreases; increases; increases
d. decreases; increases; increases; decreases
e. increases; does not change; does not change; increases
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