A subsidy will increase consumer and producer surplus in a market and will increase the quantity of trades. A subsidy (such as a subsidy for producing corn in the United States) can be considered inefficient because a subsidy results in a quantity: multiple choice higher than the market equilibrium quantity where the cost of supplying that unit exceeds the willingness to pay. higher than the market equilibrium quantity where the cost of supplying that unit is less than the willingness to pay. lower than the market equilibrium quantity where the cost of supplying that unit is less than the willingness to pay. lower than the market equilibrium quantity where the cost of supplying that unit exceeds the willingness to pay.