The graph below shows the market for wine in the ancient Roman province of Potium. Equilibrium is at E at the cross of demand (AB) and supply (GH). To win the gratitude of the mob governor Fidelius subsidises the sales of wine. As a result, the quantity produced and sold increases from Q_Eto Q_S. Consumers pay the price P_Cper unit while producers receive P_Sper 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