6.1.5 Subsidies vs taxes

In this graph, the transition from taxes to subsidies is visualized to illustrate again the schematics and inner logic of these market interventions. The explanations correspond to those of the two individual sections on taxes and subsidies. As long as the slider is set on taxes, the producer surplus, the consumer surplus, and the tax volume can be seen clearly. However, when transitioning to subsidies, the two surpluses overlap partially with each other as well as with the subsidy volume.

(c) by Christian Bauer
Prof. Dr. Christian Bauer
Chair of monetary economics
Trier University
D-54296 Trier
Tel.: +49 (0)651/201-2743
E-mail: Bauer@uni-trier.de
URL: https://www.cbauer.de