Study the Zucchini market. Suppose the equilibrium price E1 is initially $3.00 a pound.The quantities exchanged are 200 pounds of zucchinis at $3.00 a pound.Suppose now that consumer's demand is perfectly elastic and the government subsidizes the production of zucchinis for $1.20 per pound and the quantities exchanged are $400.

The burden faced by producers is:

$0

-$0.20

$1.20

-$1.20