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.

[BollzOfSteel]

Clear and concise. Watching this video is like a crash course to understand the topic. Thanks for uploading!

[jinbotak]

Simple, yet effective. Excellent ! Can't thank you enough!!

[rayamahony]

This was really really really helpful, thank you so much

[MingLeng-lv]

Oh I understand it at once!!!! You help me a lot!!! Thanks!!!

[nunvikingsofthesea]

Wow, jason, great video! Explained it much more clearer than my textbook. Keep up the good work.

[sk.samiulreza]

Excellent channel. Absolutely crystal clear teaching method.

[janmohammadnoor]

Thanks alot !your videos are really helpful for me

[benjaminadolph]

Excellent video. Really helped me grasp the effect of subsidies.

[Tirthankar]

The intro is so 2011. Also, thanks for the video. Helped a lot

[DDZTDD]

Thanks for your explanation! Very helpful!

[JasonWelker]

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

[beomkomap]

Just want to say thank you for the efforts put in and your way of teaching is super crystal clear. Please contribute more videos to our students around the world and I have subsribed! Love from Singaore.

[tinashemisheckmukanyawu]

very helpful and easily understandable. Thank you

[tdofeldt]

So is the producer surplus equal to $1 or $2?

[alec]

This video has a ton of helpful info, but there is an error/typo in I noticed confused me a bit for my Econ class.
Consumer Surplus = Represented by top highlighted area on the triangle
Producer Surplus = Represented by lower highlighted area on the triangle
(Google producer surplus and check images and see for yourself)
The video shows it as the other way around around the 6:00-7:00 minute mark

When asked questions such as "How much producer/consumer surplus is shown in the graph?", I was getting my answers backwards until I noticed this

[ruizeli]

I'm not quite sure about the producer surplus increased.Why it is the part above the equilibrium price?

[jakobklemm]

Your videos are fantastic! Could you do a video on factor markets? It comes up a lot in the AP Micro exam and I don't really understand it.

[whosAltoon]

I love you man! thanks this well help me with my final exam tomorrow! 

[chucktetro]

Hi Jason, my IB Econ students want to know where the deadweight loss goes... more exactly, how might they visualize that loss in a market?  Thanks!

[sebastianodalsie]

but if we have a percentage subsidy (example 70% of total expenditure, so an ad valorem subsidy), how is the exercise constructed? how supply and demand curve slopes change?