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Micro 4.6 Lump Sum and Per Unit: Econ Concepts in 60 Seconds

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Uploaded by on Nov 6, 2009

Mr. Clifford's 60 second explanation of the difference between lump sum and per unit subsidies. Remember, lump sum affects only fixed costs so MC won't shift. A per unit subsidy will affect MC and therefore output. Please keep in mind that these clips are not designed to teach you the key concepts. These videos are a review tool to help you better understand what you learned in class.

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  • You're the Jim Cramer of education....yes, take that as a compliment.

  • @jaw3294 yeah but i think youre thinking it was a per unit tax, hes talking about a per unit subsidy so it increases it instead of decreasing it

  • when a curve decreases, doesn't it shift left?

  • is it possible for monopolies to feel self-compelled to produce where p=mc if the total revenue and social benefit happens to be higher?

  • Do you think it's possible to compel a firm to be allocative efficient (where P=MC) by offering them subsidies?

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