The Figure Below Shows the Demand (D) and Supply (S)

The figure below shows the demand (D) and supply (S) curves of corn syrups.Figure 21.3

-One of the negative impacts of export subsidy is that:

A) the price of the domestic good increases in the world market.
B) the domestic supply of the goods increases more than proportionately than increase in demand.
C) the domestic cost of production of the exportable increase.
D) it results in a general deflation and hence the domestic producers incur losses.
E) it is financed by the taxes paid by domestic consumers and hence it harms them.

Correct Answer:

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