Apples................subsidy????????

Look at this scenario....

A owns a farm which can produce 10 apples every day. He has 5 workers to operate the farm. Each of them (A and his 5 workers) eats 1 apple daily and it is enough to keep them operating the farm normally. A then sells the remaining 4 apples at $10 each and he earns $40. He uses the $25 to improve the farm operation and facilities. He gives $2 to each of his workers as salary and he keeps the remaining $5 as profit. Day by day, the farm is well developed and all of the 5 workers are happy with the money they receive.

When A died, a new owner, B takes over the farm operation. He says to the workers: "We need to improve the farm quality and redefine our way of thinking. From now on all of you only need to pay $1 for each apple you eat. It is very cheap as the price is $10 each outside the farm, at the market". The workers have no choice but to pay $1 for the apple they eat daily. Their earnings decrease from $2 to $1 per person. As usual, B sells the 4 apples and he gets $40 in total. He uses $25 for farm improvement and pays $10 ($2 each) to his 5 workers. He gets $5 as profit. On top of that, he gets another $5 from the apples that he sells to his workers. In total, he gets $10 as profit every day.

Soon, the apple price increases to $20 each. B gets a higher profit of $80 for the 4 apples he sells daily. Then, he decides to give the farming improvement contract to one of his close friends, C. Gloomingly, C says: "Apple price has gone up, improvement cost must also go up, I can't avoid it". So, the farm improvement cost increases from $25 to $50. In actual case, the improvement only costs $30. The remaining $20 is discreetly shared equally between B and C.

Now, let's calculate how much B gets daily:

$10 ('illegally' from farm improvement cost)
$20 (Net profit by selling 4 apples: [Gross profit, $80] -[Improvement cost, $50] - [Wages $10] = $20)
$5 (from selling apples to his workers)

In total, B gets $35 daily compared to $10 initially when he takes over the farm from A. His profit increases to $25 and the workers are still getting $1 net daily per person. The greedy B does not want to stop there. One day, he says to his workers: "You see, the current market price for one apple is $20 and you are only paying $1. See how lucky you are! I have to SUBSIDIZE $19 for each of the apple you buy and in total I need to SUBSIDIZE $95. This will greatly burden the farm and I might go bankrupt if we continue like this and all of you will be jobless. In order to avoid bankruptcy, I need to increase the apple price that you buy from $1 to $1.50 and I will bear the remaining $18.50 per apple as my SUBSIDY to all of you".

So, greedy B adds $2.50 to his current profit and the number becomes $37.50.

After you have read the story, I am sure you might have already understood the meaning of "SUBSIDY". The $95 subsidy never existed in the first place and so is the fuel subsidy generously "given" your government

Think about it...