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Question: the state of delaland has two types of town type...

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The state of Delaland has two types of town. Type A towns are well-to-do, and type B towns are much poorer. Being wealthier, type A towns have more resources to spend on education; their demand curve for education is Q = 100-2P, where P is the price of a unit of education. Type B towns have a demand curve for education which are given by Q = 100-4P.

(c) Delaland wants to completely equalize the units of education across towns by taxing type A towns for each unit of education they provide and subsidizing type B towns for each unit of education they provide. It wants to do this in such a way that the taxes on type A towns are just enough to finance the subsidies on type B towns. If there are three type A towns for every four type B towns, how big a subsidy should they provide to type B towns?

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