a. Let the world price be $18, which line in the graph describes the “new" demand curve for the monopolist after a quota of 200 units is imposed? b. Which line describes the new MR curve after the quota is imposed? c. With a quota of 200 units, how many units would be produced in a perfectly competitive home market? What would be the price of each unit?

a. Let the world price be $18, which line in the graph describes the “new" demand curve for the monopolist after a quota of 200 units is imposed? b. Which line describes the new MR curve after the quota is imposed? c. With a quota of 200 units, how many units would be produced in a perfectly competitive home market? What would be the price of each unit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose Guatemala is open to free trade in the world market for wheat. Since Guatemala is small relative to the international market, the demand for and supply of wheat in Guatemala have no impact on the world price. The following graph shows the domestic market for wheat in Guatemala. The world price of a ton of wheat is Pw = $400. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (?) PRICE (Dollars per ton) 1200 1100 1000+ 900 800 700 600 500 400 300- 200 0 Domestic Demand 20 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of wheat) PW 160 180 200 A CS T PS Because Guatemala participates in international trade in the market for wheat, it will import tons of wheat. Now suppose the Guatemalan government decides to impose a tariff of $200 on each imported ton of…
Use the green point (triangle symbol) to shade consumer surplus in Cambodia before China's clothing industry expands. Then use the purple point (diamond symbol) to shade producer surplus.
Consider the pharmaceutical market in the US. The demand is Q = 200 - 2P Q P while supply is 2 40s Q P. The free trade price is 25. A) Calculate consumer surplus, producer surplus, total surplus, and imports under free trade. Illustrate all of these on a fully labelled graph. B) Suppose that the US puts a tariff of 6 on pharmaceuticals. When it does this, the free trade prices falls to 24. Calculate consumer surplus, producer surplus, tariff revenues, total surplus and deadweight loss under the tariff. Illustrate all of these on a fully labelled graph. C) Is the country better off under the tariff or free trade? How do you know?
Explain how a US QUOTA on foreign dairy would affect each group in the economy. Use the picture below to answer the question, each word is only used once.
Consider the market for wheat as shown in the Wheat Exports figure. In that figure, the world price p., for wheat is $300 per tonne. a) Perform a Welfare Analysis on the free trade equilibrium. That is, describe and show the Consumer Surplus, Producer Surplus, Government Tax Receipts, Total Surplus, and any Deadweight Loss. b) Suppose the government introduces a tax on exported wheat, so that firms must pay the government $75 per tonne of wheat exported. (i) Argue why this would reduce the price paid by domestic consumers, even though wheat sold to them does not attract the tax. (ii) Perform a Welfare Analysis on the effect of this tax. That is, describe and show the Consumer Surplus, Producer Surplus, Government Tax Receipts, Total Surplus, and any Deadweight Loss. (iii) For any Deadweight Loss identified, give an intuitive description of why this deadweight loss exists. c) Suppose instead the tax were $150 per tonne for exports. (i) What price would domestic consumers now pay for…
Lesson 12 Question 1
Problem 2.1: Suppose that Domestic's market demand is given by the equation P = 47 3*Qd and market supply is given by P = 14+ 7*Qs (where P is the price, Qd is the quantity demanded, and Qs is the quantity supplied). Domestic markets are perfectly competitive. Domestic faces export supply given by the equation P = 28 + 0*Qe (where Qe is the quantity exported) and is considering imposing a per-unit import tariff. Calculate consumer surplus in autarky. Please report your answer rounded to two decimal places (e.g., 4.256 becomes 4.26).
5. Agricultural export subsidies in a small nation The following graph shows the market for wheat in Canada, where Do is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that…
Supply Ра B D Pw Demand Q Which area in the above graph represents the loss in total surplus for this market if there is no international trade? (Pw is the price that the good sells for in international markets.) В C and D B and C A B and D A and B A and C A and D A
Based on the graph below, if South Africa moves from a closed market for oranges to opening this market to trade with other countries, producer surplus (under trade) will be equal to: Areas B + C O Area B Price Areas A + B + C Areas B+ C+E PD Pw Market for Oranges in South Africa D C B A Q1 E F LL Q2 Domestic Supply Domestic Demand Quantity
Domestic Demand supply Domestic supply + imports $8 C $4 Qs Q Qd International Trade Two trading partners expand a previous free trade agreement to include sugar. What is the new domestic price of sugar? Provide your answer below:
What is the product quota of Singapore?