Domestic Demand Function: p= 80-4Q Domestic Supply Function: p= 20+2.5Q There is an international trade price equal to $15 (pw=15). Although, The Government institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif   A) What is the size of this import Quota that makes  this same change in Producer Surplus as the $9 Tariff?   B) What is the Deadweight Loss under this Import Quota?

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Domestic Demand Function:

p= 80-4Q

Domestic Supply Function:

p= 20+2.5Q

There is an international trade price equal to $15 (pw=15). Although, The
Government institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif

 

A) What is the size of this import Quota that makes  this same change in Producer Surplus
as the $9 Tariff? 

 B) What is the Deadweight Loss under this Import Quota?

 

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