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The domestic supply and demand equations for good A are given by Qs=P - 40 and Qd=360 - 3p respectively. The world price of the good is $80.
The domestic supply and demand equations for good A are given by Qs=P - 40 and Qd=360 - 3p respectively. The world price of the good is $80.
a) At the current price, how much of good A is produced domestically and how much is consumed? How much of the good is the country importing from the world?
b) Graph the domestic supply and demand equations wight the world price. Show on the graph and calculate the producer surplus and consumer surplus.
c) Suppose the government wants to support domestic producers by imposing a tariff of $10 per unit of good A imported. Compute the effect on producer and consumer surplus, the amount of revenue gained by the government and the deadweight loss.
d) If you were a consumer of this good, would you vote for or against the new tariff? Explain your reasoning.
The domestic supply and demand equations for good A are given by Qs=P - 40 and Qd=360 - 3prespectively. The world price of the good is $80.a) At the current price, how much of good A is produced...