A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government then compels the exporting country to limit its T-shirt exports to 20 million per year. With the voluntary export restraint (VER) in place, the domestic price rises to $12 per T-shirt and domestic production rises to 15 million T-shirts per year. How much does the importing nation lose as a result of the VER?
A. $77 million
B. $12 million
C. $52 million
D. $20 million
Answer: C
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