How subsidies affect supply and demand, who actually benefits based on elasticity (subsidy incidence), and how to analyze deadweight loss.
What is a subsidy? A subsidy is really just a negative or reverse tax. Instead of collecting money in the form of a tax, the government gives money to consumer or producers. In this video, we look at the subsidy wedge and who benefits the most from different subsidies.
Microeconomics Course: https://mru.io/vuz
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00:00 Intro
00:34 What is a Subsidy?
01:31 The Subsidy "Wedge"
06:01 No Elasticity = No Entry
09:43 Example: California Cotton Farmers & Water Subsidies
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