Refer to the above graph, which shows the market for bicycles. S1 and D1 are the original supply and demand curves. D2and D3 and S2 and S3 are possible new demand and supply curves. Starting from the initial equilibrium point (#1), what point on the graph is most likely to result from reports of increased accidents on roads involving cyclists, and the payment of subsidies to bicycle producers?
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Market for bicycles
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