Answer to Question #70872 in Microeconomics for Jennifer

Question

a) Briefly, explain the impact of subsidies of the gas market in Malaysia?

b) Discuss the factors that have driven the increasing domestic demand for gas

Answer 1

a) With subsidies on the gas market in Malaysia, gas prices for the poor consumer have declined substantially, as part of the population receives a subsidy because of its low income, which allows them to reduce the cost of gas.
b) The increase in domestic demand for gas was due to the introduction of subsidies for a certain part of the population, which allowed them to use more gas at the household to replace electricity.