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Question 2 (24 marks) Read the following article from the Financial Times by Andrew Edgecliffe-Johnson published in April 2020: https://www.ft.com/content/22430f34-cb50-4f43-80eb- e2a28b88078e (750 words maximum) (a) Using economic reasoning, why are masks important? Explain. (3 marks) (b) Using economic reasoning, why does the market fail to yield the efficient outcome in the specific scenario given? Explain. (5 marks) (c) Given the current situation outlined in the article, discuss the pros and cons of imposing a price ceiling in the United States. (Be specific and link the pros and cons to the given situation) (6 marks) (d) Would the imposition of a price ceiling be an effective solution to the problem outlined in the article? Carefully discuss. (3 marks) (e) Propose an alternative method of solving the problem outlined in the article. Use diagrams to support your discussion. (marks will be deducted for incorrect or incomplete labelling of graphs)
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