The demand cure for jelly bean is given by the equation P=38-Q, where P is the price of jelly bean and Q is the quantity of jelly beans sold. The supply curve is given by the equation P=8+Q/2.
Now the government offers a subsidy of $6 to suppliers for every unit of jelly beans that they sell. The effect of this subsidy on the equilibrium price paid by consumers for jelly beans is to:
a) increase this price by $6
b) reduce this price by $6
c) reduce this price by $4
d) reduce this price by $3
e) increase this price by $3
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