Cross-subsidization policies happen when money made from one area helps cover losses in another area. This can be really helpful for important services, like healthcare, so that everyone can get what they need, no matter how much money they have.
Examples:
Healthcare Subsidies: People who earn more money might pay more for health insurance. This extra money helps keep costs lower for those who cannot pay as much.
Public Transport: Bus and train routes that earn a lot can help support routes that don’t make much money, keeping transportation available for everyone.
But, sometimes, this can mess up how things normally work in the market. It might lead to less competition or make things less efficient.
Cross-subsidization policies happen when money made from one area helps cover losses in another area. This can be really helpful for important services, like healthcare, so that everyone can get what they need, no matter how much money they have.
Examples:
Healthcare Subsidies: People who earn more money might pay more for health insurance. This extra money helps keep costs lower for those who cannot pay as much.
Public Transport: Bus and train routes that earn a lot can help support routes that don’t make much money, keeping transportation available for everyone.
But, sometimes, this can mess up how things normally work in the market. It might lead to less competition or make things less efficient.