Government Subsidy and Unintended Consequences
When the government provides a subsidy for electric vehicles to reduce carbon emissions, which of the following is a potential unintended consequence?
A
Consumers may not change their preferences at all, resulting in no significant increase in electric vehicle sales despite the subsidy.
B
The increase in demand for electric vehicles might perfectly offset the decrease in demand for gasoline vehicles, maintaining overall market stability.
C
Manufacturers of electric vehicles could ignore the subsidy, keeping prices unchanged and pocketing the extra revenue as profit.
D
The market for gasoline vehicles might contract, leading to job losses in traditional car manufacturing sectors.
Question Leaderboard
Not enough data yet to show leaderboard.