Price per litre ($)Quantity Demanded in 000Quantity Supplied in 000 litres (per Month)litres (per month)11.02710 2259 4238 6207 8176 10155 12124 14103 1672 1851 33 Construct the demand and supply curves for gasoline to show the market equilibrium for gasoline, Given a new government policy in Microland, Gasoline producers have started to obtain subsidies from the government. Construct a NEW diagram to show the impact of the subsidy on the market equilibrium.Explain the effect of the subsidy on the market forces and the equilibrium point.Nb. Answer question number 3 please.

In general, a subsidy impacts a market by lowering buyer prices and raising the quantity offered.…

Answered: Price per litre ($) Quantity Demanded…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 3PA

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Price per litre ($)	Quantity Demanded in 000	Quantity Supplied in 000
	litres (per Month)	litres (per month)
11	.	0	27
10		2	25
9		4	23
8		6	20
7		8	17
6		10	15
5		12	12
4		14	10
3		16	7
2		18	5
1		3	3

Construct the demand and supply curves for gasoline to show the market equilibrium for gasoline,
Given a new government policy in Microland, Gasoline producers have started to obtain subsidies from the government. Construct a NEW diagram to show the impact of the subsidy on the market equilibrium.
Explain the effect of the subsidy on the market forces and the equilibrium point.

Nb. Answer question number 3 please.

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