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hi everybody so you need to draw a detailed diagram of the subsidy how do you do it how do you construct this loan well you always start by moving your axis the price and the quantity R as usual draw your own issue through the rim where demand and supply to meet call that q1 the price may be once an equilibrium price once you know subsidy reduces costs of production for businesses for the supply curve shifts down was from s 1 to s 1 plus sub and that leads to a new equilibrium where theres a lower price to higher quantity Q 2 right thats all basic thats why the checklist is really helpful so mentally what you have in your head or youve got to get the basics right but then we want to show the cost of the cup you want to show the consumer saving with this subsidy I want to show the new producer remedy you want to show the wall fell off so all these things you want to show as well my head start Im looking at the government cost to do that go to the new equilibrium alright new equili
