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.
texymex1 9 months ago
@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
eaklacrosse 9 months ago
when a curve decreases, doesn't it shift left?
jaw3294 9 months ago
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?
Thizzmotion 1 year ago
Do you think it's possible to compel a firm to be allocative efficient (where P=MC) by offering them subsidies?
jumpnjza2 1 year ago