The graph below shows the market for wheat. Equilibrium is at E at the cross of demand (AB) and supply (GH). In a bid to reduce the cost of living, the government subsidises domestic wheat production. As a result, the quantity produced and sold increases from Q_Eto Q_S. Consumers pay the price P_C per unit while producers receive P_S per unit sold.

a. Identify the cost of the subsidy for the treasury

b. By using the concepts of producer and consumer surplus examine whether the subsidy increases or decreases social welfare