The fact that price subsidies reduce economic surplus implies that:
A. price subsidies help the rich but not the poor.
B. we can find an alternative policy that will make both the rich and the poor better off.
C. price subsidies are not effective at lowering prices.
D. the quantity bought and sold in the market will fall.
Answer: B
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a. True b. False Indicate whether the statement is true or false
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A. lower; potential B. higher; potential C. higher; higher D. lower; higher