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(Figure: Subsidy on Gasoline Market) Suppose the government subsidizes gasoline either by paying gas suppliers directly, causing the price of gasoline to fall, or giving
(Figure: Subsidy on Gasoline Market) Suppose the government subsidizes gasoline either by paying gas suppliers directly, causing the price of gasoline to fall, or giving consumers vouchers, making gasoline more affordable. The accompanying graph shows the effect of the subsidy. A graph has quantity (in thousands of litres) along the horizontal axis ranging from 0 to 32, in increments of 4, and price along the vertical axis ranging from 0 to 8 dollars, in increments of 1 dollar. The Supply line extends from (6, 2) to (24, 6). An Old demand line extends from (4, 5) to (20, 1). A New demand line extends from (4, 7) to (20, 3). All values are approximate. You can infer that _____ receive the subsidy in the amount of $_____ per litre, leading to a rise in the quantity of gasoline purchased by _____ litres. a. buyers; 2; 4,000 b. sellers; 2; 4,000 c. buyers; 1; 2,000 d. sellers; 1; 2,000
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