14. Restructuring Prevention:
Welfare Impact
Change producer surplus = zero (profit is zero pre
and post).
Change consumer surplus = a+d.
Subsidy cost = a-c.
Total impact = d+c.
15. EU policies on ‘State
Aids’
1957 Treaty of Rome bans state aid that
provides firms with an unfair advantage and
thus distorts competition.
19. Next Week
Inequality in the EU
Read: Michie, J., `Unemployment in Europe', in
Amin and Tomaney, eds. Behind the Myth of
European Union: Prospects for Cohesion,
Routledge Press, 1995, pgs. 51--82. 337.14
AMI
