Demand and supply in action - Prices in Iran rise after lifting of subsidies

This article helps illustrate the effect of subsidies (in this case the lifting of) on the market price of a particular good or service. Remembering the mnemonic PINTSWC, here the focus is on S – subsidies.

“The Iranian government’s removal of decades-old subsidies for food and energy in an attempt to boost its troubled economy has spurred price increases on everything from fruit and vegetables to gasoline, generated work stoppages and emboldened the political opposition.”

Pupils could draw the inward shift of the supply curve after the subsidy has been removed as firms suffer higher costs and as a result raise their prices.