Assume that all tabiets are identical goods, and that the market is competitive. The demand for tabiets from users in Europe is given by the demand curve Q = 300 - 2P; and the supply of tabiets from European manufacturers is given by the supply curve Q = 20 + 8P; where the price P is measured in hundreds of euros and the quantities Q are measured in milions. The market for tablets in Europe is large enough to influence the worid price. The export supply curve of foreign manufacturers selling in the European market is given by Q = 20P – 20. 1. What would be the price of a tablet in Europe if imports were banned? 2. If tabiets can be imported freely into Europe: (a) What is the equilibrium price of tablets in the European market? (b) What are the quantities consumed, produced, and imported in the European market? (C) What are the resuiting consumer, producer, and total social surpluses in Europe?

Assume that all tabiets are identical goods, and that the market is competitive. The demand for tabiets from users in Europe is given by the demand curve Q = 300 - 2P; and the supply of tabiets from European manufacturers is given by the supply curve Q = 20 + 8P; where the price P is measured in hundreds of euros and the quantities Q are measured in milions. The market for tablets in Europe is large enough to influence the worid price. The export supply curve of foreign manufacturers selling in the European market is given by Q = 20P – 20. 1. What would be the price of a tablet in Europe if imports were banned? 2. If tabiets can be imported freely into Europe: (a) What is the equilibrium price of tablets in the European market? (b) What are the quantities consumed, produced, and imported in the European market? (C) What are the resuiting consumer, producer, and total social surpluses in Europe?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assume that all tablets are identical goods, and that the market is competitive. The demand for tablets from users in Europe is given by the demand curve
Q = 300 - 2P;
and the supply of tablets from European manufacturers is given by the supply curve
Q = 20 + 8P;
where the price P is measured in hundreds of euros and the quantities Q are measured in millions. The market for tablets in Europe is large enough to influence the world price. The export supply curve of foreign manufacturers selling in the European market is given by
Q = 20P – 20.
1. What would be the price of a tablet in Europe if imports were banned?
2. If tablets can be imported freely into Europe:
(a)
What is the equilibrium price of tablets in the European market?
(b)
What are the quantities consumed, produced, and imported in the European market?
(c)
What are the resulting consumer, producer, and total social surpluses in Europe?
3. If the European Union imposes a tariff t (in hundreds of dollars) on each tablet imported,
(a)
Find the equilibrium prices of tablets in Europe corresponding tot = 30 or t=10.
(b) For each of these tariff levels, find the equilibrium quantities consumed, produced, and imported in the European market.
(C)
For the cases oft = 10 only, calculate the consumer, producer, and total social surpluses in Europe.

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