If the government stops subsidy on cocoa production, the supply curve of cocoa will

Caleb_xtreme

2 years ago

When a subsidy is removed, the cost of production for cocoa increases. This does not directly change the market price of cocoa but affects the supply side of the market. Higher production costs mean that producers are less willing or able to supply the same quantity at any given price, leading to a leftward shift of the supply curve.

Thus, removing the subsidy causes the supply curve to shift to the left, indicating a decrease in supply at all price levels.