Overview
Per unit subsidies are a crucial tool used by governments to support specific industries and encourage production and consumption. By providing financial assistance on a per unit basis, these subsidies aim to lower costs for consumers and incentivize producers. However, while they can stimulate econ...
Key Terms
Example: The government offered a subsidy to farmers to encourage crop production.
Example: At market equilibrium, the price of apples stabilizes as supply meets consumer demand.
Example: Lower prices due to subsidies can lead to increased consumer purchases.
Example: Subsidies can serve as incentives for producers to grow more crops.
Example: The government implemented price support for dairy products to stabilize farmers' income.
Example: The economic impact of subsidies can include job creation and increased production.