I am currently working on an assignment and needed some help.
My assignment requires me to find an article relating to a form of government intervention such as taxes or subsidies and analyse the article using a supply and demand diagram.
For my essay, I have chosen an article that essentially talks about a rebate that should be removed. So far I have written that the consumer subsidy causes negative externalities and the removal of these rebates would help reallocate resources for incentivizing other methods. I know that rebates are essentially subsidies given to consumers to increase consumption, so they would affect the demand curve. However, I am stuck on the diagram as I am confused on which way the demand curve shifts and why. Would you please help me?
Thanks in Advance