A subsidy is a negative tax through which the government gives people money instead of taking it

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A subsidy is a negative tax through which the government gives people money instead of taking it from them. If the government applied a $1.05 specific subsidy instead of a specific tax in Figure 2.12, what would happen to the equilibrium price and quantity? Use the demand function and the aftersubsidy supply function to solve for the new equilibrium values. What is the incidence of the subsidy on consumers?

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