Figure 5.1 illustrates the steel market for Mexico,assumed to be a "small" country that is unable to affect the world price.Suppose the world price of steel is given and constant at $200 per ton.Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country

-Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers,as indicated by the supply schedule SM (with subsidy).??The total cost of the subsidy to the Mexican government equals:

Question

Figure 5.1 illustrates the steel market for Mexico,assumed to be a "small" country that is unable to affect the world price.Suppose the world price of steel is given and constant at $200 per ton.Now suppose the Mexican steel industry is able to obtain trade protection.
Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country
 
-Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers,as indicated by the supply schedule SM (with subsidy).??The total cost of the subsidy to the Mexican government equals:

Quizplus · Accepted Answer

The total cost of the subsidy is calculated by multiplying the subsidy amount per ton ($200) by the quantity of steel produced. Assuming the quantity produced is 4 tons, the total cost would be $200 x 4 = $800.

Figure 51 Illustrates the Steel Market for Mexico,assumed to Be a a "Small