What would happen in the market

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Reference no: EM1313553

Q. Another senator on the Committee has a different concern than the one stated in part b. He is worried which the free-market price may be too low to enable producers to earn a fair rate of return on their business operations. He asks you to Explicate Illustrate what would happen if after privatization, the Chinese government agreed to purchase the good at a floor (minimum) price of $4. Explain how would you answer the senator? In addition to telling the senator Illustrate what would happen in the market, please Specify whether the policy would cost the Chinese government anything also if so, and explain how much.

Reference no: EM1313553

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