AI-generated, not reviewedHL only4 marks, command term Calculate
The figures are invented. A diagram shows Country Z's market for sugar, with price ($ per tonne) on the vertical axis and quantity (thousand tonnes per year) on the horizontal axis. The world price is $20. With free trade domestic producers supply 500 and consumers demand 1,500. The government pays domestic sugar producers a subsidy of $4 per tonne. Domestic producers now supply 700. Consumers still pay $20 and demand 1,500. (i) Calculate the cost of the subsidy to the government. [2] (ii) Calculate the change in foreign producers' revenue. [2]
HL Paper 3-style calculation (standalone practice; not an IB question).