To enable more citizens to buy more gasoline the Government

To enable more citizens to buy more gasoline, the Government decides to give gasoline producers a subsidy of $12 per unit– Using the supply and demand equations from #2. What price will consumer’s pay and how much gasoline will they buy if the equilibrium price and quanity is 305 and 140 respectively?

Solution

Answer :- Consumer will pay price of $ 293 (305 - 12) per unit of gasoline.

Consumer will purchase 152 (140 + 12) units of gasoline.