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The first 10 questions apply to Figure 1 -- which illustrates the case of a large exporter that applies a per-unit specific production subsidy of

The first 10 questions apply to Figure 1 -- which illustrates the case of a large exporter that applies a per-unit specific production subsidy of $s/unit.

What is the new world price after the production subsidy is applied?

Question 1Answer

a.

P3

b.

P2

c.

P1

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