 So, in this section of analysis of export subsidies, second section, we will discuss what consumer gain in and what producer gain in the net form, like what particular amount of gain a consumer have or loss consumer have and then what producer is gaining or losing after getting subsidies. Starting from the same point, we discussed a few things in the previous module. You have the principal demand and supply forces and we assume that international price is $3.5 and then the state is providing subsidy of $0.5. Ultimately, international price became $4 and then supply is at J bar that is $40 and then demand is $10 and exports are $30. If you look here, then you have domestic consumer lose, that is A bar and B bar. The reason for this first price was here, then you have this section of demand curve and area under the demand curve is normally consumer surplus. The principal consumer surplus was at this point, this triangle form. As the price increases and increases from this consumer surplus to $4, you have this share and this share and we towed this share from rotation A bar and B bar. Here, we can easily calculate this. To calculate A bar, we can find out the area of the rectangle, that is 0.10, that is 10 and that is 0.5. So, here we can say that you have 10 into 0.5, that is 5. So, you have this area of A bar, that is 5. Similarly, you can remove the area of B bar, that is triangle. You have triangle H bar, N bar and B bar. For this, you can apply 1 over 2 base into height formula. For ultimately, you can find out the area. 1 over 2 base is, I suppose, 10 and height is 0.5 and then, which is equal to 2.5. Actually, if we eliminate 0, convert 0.5 into denominator form, then it will be 1 over 2, 10 into 5 over 10, 2.5. So, you have here, A bar area is 5 and B bar area is 2.5. When they are summed, ultimately, you have the consumer's loss, that is of 7.50 dollars. Now, let's see how the producer gains in this case. Do the producers gain? In this case, obviously, if the prices are higher, the major player who has the benefit here, that is producer. How much is the benefit for the producer? We say here that the producer's gain is A bar, B bar and C bar. Principally, first when the price was this, then when the price was this, then all the other areas, A bar, B bar, C bar, go to the producer. Interestingly, we have also removed A bar and B bar from this. So, C bar can be easily found out. We can divide it into triangles and rectangles and remove the areas. So, here, you have to remove the area of this triangle, C bar, it has to be removed, in this case, and this area. When we sum up all three, then because this is the same practice, you can easily find out. Basically, triangles and rectangles have been discussed before. So, when you calculate this, I leave it as a home assignment for you. You ultimately have a figure that is 18.75. And the state, the third major player, if we talk about that, then the subsidy is giving B bar, C bar and D bar. So, the subsidy here is 15. You can calculate this as well. If you remove C bar, I assume that ultimately, if you remove A bar, B bar 7.50, then you have C bar area that would be 18.75 minus 7.50. So, if you find out this, you will have this area 11.25. So, easily from here, actually because you have removed A bar and B bar, you can easily remove C bar. Because you have this figure here of 18.75. C bar is 11.25. Government subsidy is B bar, C bar plus D bar. If you remove D bar like this, 1 over 2 base is 5, height is 0.5. And you can add this. So, this goes into the subsidy form of $15, which goes towards the state. And then the consumer once again loses that is 7.50. And producer is the only player which is getting out of this subsidy, that is $18.75. Now, the nation 2 here has to bear the protection cost. Now, which we also call dead real loss in other words. This concept we had discussed earlier that when you do not have any effect of policy, no positive effect or any gain, not going to the consumer, not going to the producer, not going to the state, then you normally talk about dead real loss. And ultimately, because of these efficiencies, we have discussed this before, comprehensively. Here, the protection costs are coming because of two areas. That is B bar, H bar, and N bar. This is the protection cost. And then, the other protection cost is C bar, J bar, and M bar. This is the D point. B and D as you can call it. And if you calculate it, you can calculate it with exactly the same formula. We calculated B as 2.5. The same formula. So, it is written here. In the same way, you can find out the value of C bar, J bar, and M bar, which is $1.25. If you add these two, then you can find out that you have 3.75. You have it in the form of dead real loss, which you call in simple sense protection cost. Now, ultimately, a question is raised that if the producer is taking advantage of it, then why do states give subsidies? Ultimately, if you look here, then consumers are losing. So, one of the major reasons for this is that you have lobbing, which are powerful corners or powerful circles in the state. They also lobby. Under which, the state is forced to subsidize particular industries, particular sectors. If you look at its classical example, primarily, it is said in Pakistan that we should export sugar. We, because we are farmers, agriculture countries, so the primary objective of every year is that we export it. And by exporting it, ultimately, you get gain in terms of foreign revenues or foreign exchange form. You get dollars. But ultimately, what happens? What happens is that you have sugar shot in the domestic market. And why does the subsidy go down every year? So, you can understand the politics behind this one, who owns the sugar industry mostly. So, what kind of people have it and how it affects the power corridors, the decency and how it is lobbing. So, we can ultimately say that you have a domestic producer who has the advantage and the domestic consumer has a loss. If there are already prices high like this one, domestic markets, right? So, at least the objective of trade was that you should at least provide the domestic consumer with sufficient things. But the classical case I have discussed in Pakistan, that is of basic necessity, sugar, which everyone uses. For layer goods, it can be a good policy to get higher returns out of exports. But the basic needs to achieve this, to some extent, hurt you a lot. And ultimately, the gain that is most important is the foreign buyer. Where, if you look at it, before the trade, or before the subsidies, not before the trade, but before the subsidies, you were able to buy 15 commodities on the free trade, 15x. But now, because of the subsidies, you have 30x in the form. So, ultimately, the distribution of the export subsidies, how does it affect the state, how is the consumer, and how is the producer.