If the government stops subsidy on cocoa production, the supply curve of cocoa will
- become vertical
- remain unchanged
-
shift to the left
- shift to the right
The correct answer is: C
Explanation
If the government stops subsidy on cocoa production, the supply curve of cocoa will shift to the left. This is because the subsidy was making it cheaper to produce cocoa, so when the subsidy is removed, the cost of production will increase. As a result, fewer cocoa beans will be supplied at any given price.