0 10 20 30 40 50 60 70 80 90 100 0 1 2 3 4 5 6 7 8 9 10 Demand Supply with no subsidy Subsidy Analysis
Subsidy analysis
Jun 10, 2015
Subsidy Analysis
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0
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Demand
Supply with no subsidy
Subsidy Analysis
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0 1 2 3 4 5 6 7 8 9 10
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
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Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
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Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
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Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
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Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
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0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
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0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
Subsidy
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10
20
30
40
50
60
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90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Sellers receive 70
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
Subsidy
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Sellers receive 70
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
Buyers pay 30
Subsidy
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Sellers receive 70
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Subsidy of 40
Buyers pay 30
Government pays 40 in subsidy
Subsidy
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0 1 2 3 4 5 6 7 8 9 10
Supply with subsidy
Demand
Supply with no subsidy
Sellers receive 70
Subsidy Analysis
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
Government spends 280 to get 240 gain
Deadweight loss of 40Subsidy of 40
Buyers pay 30
Government pays 40 in subsidy
Subsidy
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
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0 1 2 3 4 5 6 7 8 9 10
Subsidy Analysis
0
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Subsidy Analysis
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Subsidy Analysis
0
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Subsidy Analysis
0
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Subsidy Analysis
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Subsidy Analysis
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Subsidy Analysis
Deadweight Loss
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Subsidy Analysis
Deadweight Loss
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Subsidy AnalysisSellers increase
surplus from 125 to 245
Buyers increase surplus from 125
to 245 Total increase
from 250 to 490, or 240 gain
Deadweight Loss
0
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0 1 2 3 4 5 6 7 8 9 10
Subsidy Analysis
Government pays 280 in subsidy
Surplus increases by 240
Deadweight loss of 40
Sellers increase surplus from 125
to 245 Buyers increase
surplus from 125 to 245
Total increase from 250 to 490,
or 240 gainDeadweight
Loss
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