The US government provides subsidies for a variety of agricultural products. A subsidy is the opposite of a tax.

A) In the absence of government involvement, what is the equilibrium price and quantity in the market for corn in the graph to the left?

B) If the government offers a $2 per unit subsidy to the suppliers of corn, what happens to the price consumers pay inclusive of the subsidy?

C) What is the price producers will receive, inclusive of the subsidy.

D) Use the graph to illustrate the effect of the subsidy on consumer and producer surplus, as well as total economic surplus.