The document shows diagrams of supply and demand curves with and without subsidies. It illustrates how a subsidy shifts the supply curve down, increasing the quantity supplied and lowering the price. It also shows that with a $40 subsidy, sellers receive $70, buyers pay $30, and the government pays $40, resulting in a $240 gain but $40 of deadweight loss.

1. 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

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

19. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

20. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

21. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

22. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

23. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

24. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

25. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

26. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

27. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

28. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

29. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

30. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

31. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
0 1 2 3 4 5 6 7 8 9 10

32. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Deadweight
Loss
0 1 2 3 4 5 6 7 8 9 10

33. 100
90
80
70
60
50
40
30
20
10
0
Subsidy Analysis
Deadweight
Loss
0 1 2 3 4 5 6 7 8 9 10

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