Supply and Demand

Consumers benefit from increased supply and lower prices

Foreign producers increase their market share

Trade between countries becomes more balanced automatically

Domestic producers benefit from reduced competition

A trend towards perfect competition ensues, with impacted firms seeking to differentiate themselves and create niches rather than engaging in head-on battles with larger incumbents enjoying newfound financial support.

An informal collusion might develop with all receiving subsidies agreeing not to compete aggressively, preserving mutual benefits and thus distorting intended competitive dynamics further.

An arms race type escalation of spending resulting from each firm attempting to overpower others financially leveraging subsidy funds to bolster their position.

Predatory pricing practices emerge as one or more empowered firms use their extra resources to undertake sustained selling below cost to drive rivals out of business, and then raise prices afterwards.

Create Shortages

Improve Housing Quality

Incentivize new construction

Lower Rent Costs

To encourage competition among firms

To make goods or services more affordable for consumers

To increase profits for producers

To eliminate the equilibrium price in the market

It reduces both allocative efficiency and equity because taxes create deadweight loss without addressing income disparities.

It diminishes equity since only polluters pay the tax but maintains allocative efficiency as markets adjust naturally over time.

It improves allocative efficiency by internalizing negative externalities but may be regressive impacting low-income individuals more harshly.

It enhances both allocative efficiency and equity by correcting market failures while evenly distributing tax burdens across income levels.

Higher profits earned by non-subsidized competing firms.

The lower prices consumers pay for subsidized products.

Decreased employment within subsidized industries due to automation.

Other governmental programs that could have been funded with those resources.

It encourages consumers to purchase only domestic goods, leading to a complete ban on imported items eventually.

It decreases overall prices as foreign producers reduce their exports due to lack of access to markets.

It limits the quantity of these goods, thus potentially increasing demand for substitute domestic products.

It increases efficiency as both domestic and foreign firms must compete on quality rather than price.

Reduces Price

Increase Domestic Production

Limits Quantity

Raises Quality

It would likely lead to a decrease in production as the companies would have less financial support.

It would likely lead to a shift in production towards other industries as the companies would seek more profitable opportunities.

It would likely have no impact on production choices as the companies would find other ways to fund their operations.

It would likely lead to an increase in production as the companies would need to find alternative sources of funding.

They stay exactly the same.

Consumer preference shifts towards luxury goods.

They rise.

They fall.