Suppose that the world price of sugar is $100 per ton.If a
Large country gives its sugar exporters a subsidy of $50 per
Ton, then its domestic price of sugar will:
A)fall by $50 per ton.
B)rise by $50 per ton.
C)remain unchanged at $100 per ton.
D)rise by less than $50 per ton.

Question

Quizplus · Accepted Answer

The subsidy makes exporting more attractive, increasing demand for domestic sugar, which raises the domestic price, but not necessarily by the full subsidy amount due to market adjustments.

Suppose That the World Price of Sugar Is $100 Per