1.14. Suppose that the supply curve for solar panels i as shown in the diagram:

Price $80 70 60 so 40 30 20 10 0

20 40 60 80 100 Quantity The government decides that it would like to increase the quantity of solar panels in use, so it offers a $20 subsidy per panel to producers. Draw the new supply curve. As a hint, remember our analysis of how a tax affects supply, as shown in Figure 3.12, and bear in mind that a subsidy can be thought of as a

"negative tax."