Question 5: The demand and supply functions for a good are Pa = 350 - 2Q and P: = 140 4 5Qs, respectively. If the government provides a subsidy of $70 per unit sold. Outline the distribution of the subsidy, that is, calculate how much of the subsidy is received by the consumer and producer. A: The consumer now pays $270, a decrease of $20 on the equilibrium price with no subsidy ($290) and the producer receives $340, an increase of $50 on the equilibrium price with no subsidy B. The consumer now pays $300, an increase of $10 on the equilibrium price with no subsidy ($290) and the producer receives $230, a reduction of $60 on the equilibrium price with no subsidy C. The consumer now pays $310, an increase of $20 on the equilibrium price with no subsidy ($290) and the producer receives $240, a reduction of $50 on the equilibrium price with no subsidy D. The consumer now pays $255, a reduction of $35 on the equilibrium price with no subsidy ($290) and the producer receives $325, an increase of $35 on the equilibrium price with no subsidy E. none of the above