Answer:
At that price, quantity demanded exceeds quantity supplied.
Explanation:
The subsidy is a government financial aid for a particular sector to produce a type of good, such as corn. This is applied when the value of the product is low enough to make production unfeasible. Because corn is an important product for the food industry and animal feed, the government gives producers a subsidy, which will be above market value. However, if the subsidy is low enough to not stimulate corn production, demand for the product will exceed supply. The solution to this is to raise the price of corn or to increase subsidies so that farmers have a stimulus to produce a quantity that meets demand.
