sales subsidy paid to sellers at a fixed amount per unit...effect on price and quantity?

Question

hi there,
im trying to find out the effects of price and quantity in a perfect competitive market, no competition.
product is corn
when a sales subsidy paid to sellers at a fixed amount per unit sold

Answer 1

Increases price

Increases quantity

Draw a supply and demand curve, and then move P=price and Q=Quantity if there is no competition.

Seller will produce like crazy and raise prices in this scenario.

Answer 2

I guess we feel helpless. People say that other countries pay far more,,,but I don't live there, I live here! I don't get why people accept it either. These CEO's and Oil Industry 'top-dogs' are reaping all of the benefits. They take luxury vacations with their designer luggage, luxury vehicles, private jets, plastic wives,,,uhhem, excuse me, I'm mean nip-tucked girlfriend(s)....and we are here spending our hard-earned $$ on rising oil prices. If only there was a way to take some control over this nonsense. They laugh when we try to make an impact by not buying gas for a day--they know we have to fuel up eventually. When an email was going around that we should only fuel up at a certain brand gas station, I'm sure they laughed at that too. All the oil comes from the same place more or less! Ughgh Maybe we should all just buy a bike and ride around town or walk more like the old days...Hey, at least we will kill two birds with one stone: save gas money & excersize! You know, I sigh when I see these dumb butts burning rubber down the street...maybe they just get mommy and daddy to put the gas money in the credit card...Ok, I'm ranting, sorry. :P