Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below.
If the government provides a subsidy of $500 per ton, the equilibrium price of sugar will be ________ per ton, and the equilibrium quantity will be ________ tons per day.
A. $1,500; 12
B. $1,000; 12
C. $1,000; 8
D. $1,500; 8
Answer: B
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