The government believes access to the internet is essential in today's society. To bolster access, policy makers propose subsidizing the purchase of mobile devices to make internet available. The inverse demand for mobile devices is given by =5000.1, and the inverse supply is given by =200+0.1.

a. Solve for the equilibrium price and quantity and calculate producer and consumer surplus.

b. Suppose the government offers a $100 per unit subsidy to sellers of mobile devices. Alter your graph to analyze the subsidy and calculate the new equilibrium price and quantity.

c. Show on your graph and calculate numerically how much the subsidy will cost the government and what the net welfare effect will be for both consumers and producers.