When you give a subsidy to consumers for each unit they buy, the after subsidy cost of the good to the consumer is lower than it was before (for all units). That causes the curve to shift to the right. Consumers will buy more units at any price( the price before getting the subsidy). I hope that helps! Back in unit 2, you should have learned subsidies given to producers increase supply. Here we are talking about giving the subsidy to a different group. It works the same (increasing the given curve) no matter who gets it. I hope that helps!
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Thank you Andrew!
Why does a per unit subsidy increase the demand curve/Marginal private benefit?
When you give a subsidy to consumers for each unit they buy, the after subsidy cost of the good to the consumer is lower than it was before (for all units). That causes the curve to shift to the right. Consumers will buy more units at any price( the price before getting the subsidy).
I hope that helps!
Back in unit 2, you should have learned subsidies given to producers increase supply. Here we are talking about giving the subsidy to a different group. It works the same (increasing the given curve) no matter who gets it.
I hope that helps!
@ thanks!