Subsidy Impact on Resource Allocation
How does a government subsidy for the production of solar panels affect the allocation of resources in an economy?
A
It makes solar panels less affordable to average consumers due to increased demand.
B
It diverts all resources from non-renewable to renewable energy sources instantly.
C
It allocates more resources towards renewable energy sectors than market forces alone would do.
D
It decreases overall efficiency as companies become dependent on subsidies.
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