I have a great confusion about the fundamental of subsidy . Why government give subsidy when it can also discount the price but it doesn't do so ?
closed as unclear what you're asking by Giskard, EnergyNumbers, BKay, emeryville, Kitsune Cavalry♦ Dec 15 '16 at 3:53
Please clarify your specific problem or add additional details to highlight exactly what you need. As it's currently written, it’s hard to tell exactly what you're asking. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.
Supposing by "discount the price" you mean set a maximum allowed price that is lower than the current price. At the current price supply is equal to demand, when the price drops, there will be less supply and more demand. Then there is more demand than supply and the government doesn't want this because some people don't get what they want. Subsidies solve this problem because the price will drop because a part of the profit isn't paid for by the consumer but by the government. Then supply and demand are equal and the price is lower.