medium · GMAT Verbal
When wealthy Nation Y subsidizes its grain exports, Y's farmers sell abroad below their cost of production. Last year Y's subsidized grain flooded the world market and the world grain price fell. Farmers in developing country Z, who sell grain only at the world price and receive no subsidy, saw their revenue per ton drop.
Which of the following is most strongly supported by the statements above?
- Nation Y's subsidies were the sole cause of the fall in the world grain price.
- Z's farmers earned less revenue per ton of grain than they would have at the higher pre-decline world price.
- Z's farmers would earn more if their own government subsidized them.
- Nation Y's farmers profited from selling grain below their cost of production.
- Developing countries should impose tariffs on subsidized grain.
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