2. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
with no subsidy
Demand
Supply
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
3. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
4. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
5. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
6. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
7. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
8. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
9. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
10. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
11. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
12. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
13. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
14. 100
90
80
70
60
50
40
30
20
10
0
Supply
with subsidy
Subsidy Analysis
with no subsidy
Demand
Supply
Subsidy
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
15. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Sellers receive 70
Supply
with subsidy
with no subsidy
Demand
Supply
Subsidy
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
16. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Sellers receive 70
Supply
with subsidy
with no subsidy
Buyers pay 30
Demand
Supply
Subsidy
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
17. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Sellers receive 70
Government pays
40 in subsidy Subsidy
Supply
with subsidy
with no subsidy
Buyers pay 30
Demand
Supply
Subsidy of 40
0 1 2 3 4 5 6 7 8 9 10
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
18. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Sellers receive 70
Government pays
40 in subsidy Subsidy
Supply
with subsidy
with no subsidy
Buyers pay 30
Subsidy of 40 of 40
Demand
Supply
0 1 2 3 4 5 6 7 8 9 10
Government
spends 280 to
get 240 gain
Deadweight loss
Subsidy to Seller with shift Supply curve down by the amount of the subsidy
34. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10
Sellers increase
surplus from 125
to 245
Buyers increase
surplus from 125
to 245
Total increase
from 250 to 490,
or 240 gain
Deadweight
Loss
35. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10
Sellers increase
surplus from 125
to 245
Buyers increase
surplus from 125
to 245
Total increase
from 250 to 490,
or 240 gain
Government pays
280 in subsidy
Surplus increases
by 240
Deadweight loss
of 40
Deadweight
Loss