Problem
For this question, the demand is P = 145 - 3Q & supply is P = 35 + 2Q.
To enable more citizens to buy more gasoline, the Government decides to give gasoline producers a subsidy of $5 per unit- Using the supply and demand equations from #2. What price will consumer's pay and how much gasoline will they buy (note the answers may be fractions or in decimal points)? How much will the Government spend on the subsidy? What will be the change in producer surplus?