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Per-unit subsidy ( 從量津貼 ). P ($). S 1. S 2. Per-unit subsidy. Q. P 1. P 2. Q 1. Q 2. Incidence of per unit subsidy. P ($). S 1. S 2. R. Total Amount of Subsidy. Producer’s benefit. Per-unit subsidy. Consumer’s benefit. D. Q. P 1. P 2. Q 1. Q 2.
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Per-unit subsidy (從量津貼) P ($) S1 S2 Per-unit subsidy Q
P1 P2 Q1 Q2 Incidence of per unit subsidy P ($) S1 S2 R Total Amount of Subsidy Producer’s benefit Per-unit subsidy Consumer’s benefit D Q
P1 P2 Q1 Q2 Incidence of per unit subsidy (supply is more elastic than demand) P ($) S1 S2 Total Amount of Subsidy Producer’s benefit Per-unit subsidy Consumer’s benefit D Q
P1 P2 Q1 Q2 Incidence of per unit subsidy (demand is more elastic than supply) P ($) S1 Total Amount of Subsidy Producer’s benefit S2 Per-unit subsidy Consumer’s benefit D Q
Under what conditions will consumers get the amount of subsidy? • 在甚麼情況下,消費者可以得到整部份的津貼?
When the demand is perfectly inelastic (|Ed|=0),… (e.g., medicine for curing cancer (治療癌症藥物)) D P ($) S1 P1=50 S2 Total amount of subsidy Consumer’s benefit Per-unit subsidy P2=40 Q Q =10
When the supply is perfectly elastic (|Es|=∞),… P ($) P1 S1 Total Amount of Subsidy Consumer’s benefit Per-unit subsidy P2 S2 D Q Q1 Q2
Under what conditions will producers get the amount of subsidy? • 在甚麼情況下,生產者可以得到整部份的津貼?
When the demand is perfectly elastic (|Ed|=∞),… P ($) S1 S2 Total amount of subsidy Producer’s benefit Per-unit subsidy P1 D Q Q1 Q2
When the supply is perfectly inelastic (|Es|=0),… (e.g., tunnel, stadium) P S1 S2 Q 40,000 50,000
When the supply is perfectly inelastic (|Es|=0),… S1 =S2 P ($) Total Amount of Subsidy Producer’s benefit Per-unit subsidy P1 D Q Q1