Explain, with the aid of the above diagrams, how this industry may have ended up in this situation. Please note the left diagram represents the market and the right one illustrates the situation for an individual grape grower.

(ii) There are two solutions to this problem. Either the government can implement a subsidy which keeps the grape growers in business (bail-out solution), or the least efficient growers will have to shut down, sell up, pack up and leave the market (the market solution). Compare the natural market solution with the bail-out solution and identify the advantages and disadvantages for both solutions.