At present, 100,000 tourists visit a city per year, spending an average of $500 per visit. The government is considering a subsidy removing the toll on a highway entering the city for visitors (not locals) of $25. If they do so, 105,000 tourists are expected to visit. Analyze this (potential) policy.

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The potential policy of removing the toll on the highway for visitors to the city could have several ... View the full answer