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Microeconomics - Coggle Diagram

- - - - (+): +): firms' costs of production would be reduced, they would be willing and able to produce the good or service at a lower price so that more people can afford it --> reducing the potential welfare gain, i.e. gaining extra social welfare.
      - (-): Each subsidy uses government funds and therefore has an opportunity cost because the government would have to cut back on alternative expenditures that might be important
      - (-): generate production inefficiencies in private firms because part of their revenue is guaranteed by the governmenㅅ
    - - (-): The cost to the government might be very high and create an
        opportunity cost
      - (-): government might be less efficient than private firms at providing these services, and the quality of the good or service might not be as good
      - (-): Private firms might be dissuaded from investing in these areas because the government will provide these goods or services anyway.
    - - (-): generate an opportunity cost for the government
    - - (-) : only be successful if the government provides the goods and services free of charge.
        
        (-): additional cost/mnitering of enforcing the law.