Using an appropriate diagram, explain whether two of the following statements are true or false, and why

1. True False (30 points) Using an appropriate diagram, explain whether two of the following statements are true or false, and why. If you answer more than two, your best two answers will be used. In a market with an initial price of $1.00, an initial quantity exchanged of 10,000, and elasticities of demand and of supply equal to 3, a subsidy of $.20 will cause an increase in the price to consumers of $.10. If the demand is elastic, an increase in the price will reduce Total Revenue