What is the difference between discount and subsidy.?

Question

Answer

Difference between discount and subsidy

Discount and subsidy are two different terms used in business and economics. Although they both aim to reduce the price of a product or service, they differ in their nature, purpose and mechanism. In this article, we will discuss the differences between discount and subsidy in detail.

Definition

Discount: A discount is a reduction in the price of a product or service that is offered by a seller to a buyer. It is usually given to encourage the buyer to make a purchase or to reward the buyer for making a purchase. Discounts can be in the form of a percentage off the original price or a fixed amount off the original price.

Subsidy: A subsidy is a financial assistance given by the government or any other organization to support a particular sector, industry or group of people. It is usually given to promote economic growth, create jobs, reduce poverty or achieve a social objective. Subsidies can be in the form of cash, tax exemptions, or other forms of financial aid.

Purpose

Discount: The purpose of a discount is to increase sales, attract customers, and clear inventory. It is a marketing strategy used by businesses to improve their revenue and market share.

Subsidy: The purpose of a subsidy is to support a particular sector, industry or group of people. It is a government policy used to achieve economic, social or environmental goals.

Mechanism

Discount: A discount is offered by the seller to the buyer at the point of sale. The buyer can avail the discount by paying the reduced price of the product or service.

Subsidy: A subsidy is given by the government or any other organization to the beneficiary. The beneficiary can avail the subsidy by meeting the eligibility criteria and following the application process.

Duration

Discount: A discount is usually temporary and offered for a limited period of time. It can be a seasonal offer, a clearance sale, or a promotional campaign.

Subsidy: A subsidy can be temporary or permanent depending on the objective it aims to achieve. It can be a one-time grant or a recurring payment.

Conclusion

Discount and subsidy are two different terms used in business and economics. While a discount is a marketing strategy used by businesses to increase sales and attract customers, a subsidy is a government policy used to achieve economic, social or environmental goals. They differ in their nature, purpose, mechanism, and duration.

Answer

Subsidy is generally a financial assistance given by the government to promote the production of good.
On the other hand discount is given by the trader. There is no involvement by the government

Answer

Subsidy

A payment by government, perhaps implicit, to the private sector in return for some activity that it wants to reward, encourage, or assist. Under WTO rules, subsidies may be prohibited, actionable, or non-actionable.

Discount

1. Any reduction in price or value, especially when below a stated or normal price. 2. To buy or sell commercial paper at a price below face value to account for interest to accrue before maturity. 3. To attach a lower weight to the importance

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