Assume that the market for cars that use gasoline is in equilibrium. Climate change is a

real threat to our planet. To reduce car emissions, the government is giving buyers subsidies

to buy more electric cars, a substitute of gasoline-using cars. At the same time,

suppliers of gas have found a new technology that helps in the clean production of

gas.

Based on this scenario, draw the graphs and explain what happens to equilibrium price and

equilibrium quantity. Your graphs should be labeled completely, including the x- and y-axes,

for full points. You must also give reasons as to why you shifted the demand and supply

curves the way you did.