Economics A Level: What happens to Consumer and Producer Gain when Demand is
-Inelastic
-Elastic

Question

What happens to Consumer and Producer Gain when Demand is 
-Inelastic
-Elastic

go kys · Accepted Answer

1. With Inelastic Demand: The Consumer benefits more from a Subsidy. This is reflected with an Increased Area of Consumer Gain when compared to Producer Gain
2. With Elastic Demand: The Producer benefits more from a Subsidy. Just Reverse Consumer Gain and Producer Gain in 1.

Economics A Level

What happens to Consumer and Producer Gain when Demand is -Inelastic -Elastic

1. With Inelastic Demand: The Consumer benefits more from a Subsidy. This is reflected with an Increased Area of Consumer Gain when compared to Producer Gain 2. With Elastic Demand: The Producer benefits more from a Subsidy. Just Reverse Consumer Gain and Producer Gain in 1.

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