Discuss THREE reasons why a government would want to subsidise a product and TWO cautions or precautions that the government must take into consideration in granting subsidies.

Order Description
Essay Question: Discuss THREE reasons why a government would want to subsidise a product and TWO cautions or precautions that the government must take into consideration in granting subsidies.
Points to Note: This assessment requires you to work as an individual. The essay should demonstrate your understanding of the “Theory of Price Controls (Government Actions in the Markets)”. You will apply the theory to discuss why governments do subsidise a product and cautions/precautions that must be taken into account in granting subsidies. The learning outcome to be assessed is; “demonstrate an understating of demand and supply microeconomic foundations”. The word-count for the essay is 1,500 words, excluding references or bibliography.
Structure of the essay (Essay should be structured as follows) :
1.0 Introduction
1.1 Why a government would want to subsidise a product (discuss 3 reasons and support your discussions with examples).
1.1.1 Reason 1 1.1.2 Reason 2 1.1.3 Reason 3
1.2Cautions/pre-cautions while granting subsidies (discuss 2 cautions/precautions and support your cautions/precautions with examples).
1.2.1 Cautions/precautions 1
1.2.2 Cautions/precautions 2
1.3 Conclusion Reference / Bibliography