Question
Please explain how you came to your conclusion: In the shirt market, the equilibrium price is set at $100 per shirt. The government is interested
Please explain how you came to your conclusion:
In the shirt market, the equilibrium price is set at $100 per shirt. The government is interested in supporting consumers and bringing down the price to consumers to $90 per shirt. This goal can be achieved:
A. If the government gives a subsidy of $10 per shirt, the price to the consumer will drop to $90 per shirt.
B. In order to reduce the price to the consumer to $90 per shirt, a subsidy higher than $10 per shirt is needed.
C. It is not possible to reduce the price to $90 per shirt for the consumer by providing a subsidy.
D. The only way to bring the price of the product down to NIS 90 is to import shirts and sell them to consumers for $90.
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