Government Subsidies: Key Analysis Diagrams I A Level and IB Economics

In this video we go step-by-step through how to show the effect of a government subsidy offered to suppliers using an analysis diagram.
#aqaeconomics #ibeconomics #edexceleconomics

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[@kamogelomohuba2714]

hi there, when you say the total cost of the subsidy is equals to p3p2 xq2, what's actually happening between p3 and p2? is it addition/subtraction/divison?

[@tutor2u-official]

Addition - the producer gets the market price plus the subsidy