Question

Suppose a government decides to assist a domestic industry in international competition by offering that industry a subsidy for each unit of output it exports. Who gains and who loses from among domestic producers, their workers, domestic consumers, and foreign producers and consumers of the product being subsidized?

Answer 1

After giving export subsidies to a domestic industry what will happen to everyone

For Company's workers - It gives more benefits and salary to the workers of that company.

For Domestic Consumer- It's hurts them ,,because after giving export subsidies on the domestic industry's output the owner likely to increse more export. That's makes scarcity of that goods in the domestic economy. On the other hand it will increases the price of that good domestically and hurts the domestic consumers.

For Foreign producers - After increasing the export subsidies for the domestic company's output .The particular Company's export will increases rapidly .For that reason , the supply of that good outflows in the foreign markets.Thats badly affects the foreign producers.

For Foreign consumers - Foreign consumer will find benefits from it because they will get a lot of commodity with a lower price .Because after giving export subsidies the supply of that particular goods exceeds the demand for that goods.