1) Use the framework of demand and supply curves as described in picture to analyze the effects of subsidy on producers and consumers.2) Who benefits more from subsidy:3) Analyze different situations with respect to different elasticities.

X 0 50 60 70 80 90 100 110 120 130 140 y = -2x +450 450 350 330 310 290 270 250 230 210 190 170 y = 100 + 5x 100 350 400 450 500 550 600 650 700 750 800 y = 30 + 5x 30 280 330 380 430 480 530 580 630 680 730 1. Simultaneous equations y = -2x +450 y = 100 + 5x 840 800 y = 30 + 5x 760 720 680 640 600 560 520 480 y 440 400 X 360 320 280 240 200 160 120 80 40 0 4 8 1216202428323640444 852566064687 27 68 08 4889296 0 00408121 62 0242832364 04148