Arrange the following types of subsidies in the order they would most likely impact a firm's production decisions, starting from the least impactful to the most impactful: A) Lump sum subsidy, B) Per unit subsidy, C) Increase in demand, D) Tax credit.

To understand how different types of subsidies impact a firm's production decisions, we can start by considering a lump sum subsidy. This type of subsidy provides a fixed amount of money to a firm regardless of its level of production, which might not significantly change how much the firm decides to produce. Next, a tax credit can help reduce a firm's overall tax burden, but it may not directly affect production levels unless it encourages investment in new projects. A per unit subsidy, on the other hand, directly lowers the cost for each unit produced, making it more appealing for the firm to increase production. Finally, an increase in demand can have the most significant impact because it not only incentivizes production through higher sales but also encourages firms to expand their operations to meet the new demand.