Explain the impact of the production subsidy in terms of how it affects producers of ethanol and how it affects the supply curve in the ethanol market

Scenario The Federal Government has implemented a policy to subsidize the production of ethanol by paying manufacturers of ethanol a per-unit (e.g., per gallon) production subsidy. [A per-unit subsidy has the opposite effect of the per-unit tax discussed in class] Ethanol is an alternative fuel that can be used in some models of automobiles designed to burn any mix of […]