The figure below represents the U.S. market for steel imports from Korea. The Korean government provides an export subsidy of $25 per ton, and Korean firms use the subsidy to reduce their export price to the United States to $375 per ton.
What is the cost of the export subsidy to the Korean government?
A. $4.5 billion
B. $3.75 billion
C. $67.5 billion
D. $375 million
Answer: A
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