Glossary · Micro · Market analysis and welfare

Subsidy

A payment from the government per unit produced or bought. It works like a tax in reverse: quantity rises above the efficient level, buyers pay less and sellers receive more, and the overproduction creates a deadweight loss paid for by taxpayers.

Related terms

More from market analysis and welfare

Definitions are the start

See the term used, not just defined.

The full course teaches every term in context, with worked examples, interactive graphs and practice questions that remember what you get wrong.