1. With a fixed budget of $1 million, a city covers the full cost of a basic service for as many individuals as possible.Suppose the state offers a 30-percent matching grant, such that for every dollar the city spends on the service, the state adds another 30 cents in funding.If the market price of the service is $8 per unit, how many units of the basic service can the city provide under the matching grant from the state?

2. Given the information in the previous question, what is the effective price of the service for the city under the matching grant from the state?