omestic Demand Function: p= 100-4Q Domestic Supply Function: p= 40+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?
omestic Demand Function: p= 100-4Q Domestic Supply Function: p= 40+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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Domestic
p= 100-4Q
Domestic Supply Function:
p= 40+2.5Q
There is an international trade
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
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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