Answered

Suppose the market for exercise bikes experiences the following event: The government reduces subsides on exercise equipment. What will be the effect on the equilibrium

Answer :

Answer:

equilibrium price rises and equilibrium quantity decreases

Explanation:

Subsidies reduce the price of an item. If subsidies are decreased, exercise bikes become more expensive. Due to the higher price, the demand for bikes would reduce. Thus equilibrium price rises and equilibrium quantity decreases

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