The Effects of a Per Unit Subsidy

This video lesson illustrates and explains the effects that a per unit subsidy will have on the market for a commodity, in this case, corn. The payment to producers from government lowers the marginal cost of production, increases supply and leads to lower prices for consumers and greater revenues for producers. However, subsidies are not always economically efficient, since as we will see, the cost to taxpayers may outweigh the benefit to producers and consumers, meaning a subsidy may result in a net loss of societal welfare.

Category:

Education

Tags:

• subsidy
• microeconomics
• IB Economics
• government intervention
• AP Economics

[XxxJOHNNYmartiniXxx]

what's the song at the beginning called ?

[welkerjason]

@XxxJOHNNYmartiniXxx It's called "making me nervous" by Brad Sucks

[bellchdog]

This is a great video explanation, thanks for putting it together.

[XxxJOHNNYmartiniXxx]

@welkerjason Thanks a lot mate ! great video btw..!

[Manaskaaram]

still wondering why this has so few views...