The presence of an export subsidy (assuming that foreign demand is not perfectly-Inelastic)

Question

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An export subsidy will encourage domestic producers to produce more of the export good, leading to a decrease in supply in the domestic market and an increase in price. This will harm the well-being of domestic consumers who will have to pay a higher price for the good. However, producers will gain from the increased producer surplus due to the subsidy. In the case of a large country, the higher price in the domestic market can lead to a higher import price in the importing country, as the producer in the exporting country will have more market power to negotiate a higher price with foreign buyers.

The Presence of an Export Subsidy (Assuming That Foreign Demand