Suppose a Small Island Nation Imports Sugar for Its Population

Multiple Choice

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, then the cost of subsidy, which must be borne by taxpayers, will be ________ per day.

A) $500
B) $2,000
C) $5,000
D) $6,000