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2. Continue with the same market for bicycles (question 1 above). Let us say the policy makers in government decide that they want to encourage

2. Continue with the same market for bicycles (question 1 above). Let us say the policy makers in government decide that they want to encourage people to ride bicycles and so they announce that they will subsidize bike purchases - for every bike someone buys they (the government) pay $100 (if you buy a bicycle, you send a copy of your receipt to your city council and a week later you receive a $100 cheque)

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