Per unit subsidies always guarantee that firms will produce at socially optimal levels, regardless of market demand conditions.

Per unit subsidies are payments made by the government to firms for each unit of a good they produce. While these subsidies can encourage firms to produce more, they do not always lead to socially optimal levels of production under all market conditions. For example, if a firm receives a subsidy but there is low demand for its product, it may produce more than people actually want or need, leading to waste. The key idea is that subsidies help lower production costs, but if demand is not there, the extra production may not benefit society as a whole. Therefore, while per unit subsidies can help, they must be carefully designed and aligned with actual market demand to ensure they achieve their intended goals.