Subsidies: Consumer and Producer Benefit

When analysing the impact of government subsidies in markets, it is important to make a distinction between consumer benefit and producer benefit. This short revision video takes you through the difference and the diagrams you can draw to get good analysis marks.

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[sebastianodalsie]

I have a question. if the subsidy were for both (producer and consumer) and the government subsidy were in percentages (example 70%). how should the exercise be set up?