Optimal Tariff for a Large Importing Country Consider a large country levying a tarifft. The resulting export price is P*: The resulting import price is P= P*+ t: The importing country imports M, which equals the exporting country's exports X. Show the optimal tariff is , where E; is the elasticity of export supply.

Optimal Tariff for a Large Importing Country Consider a large country levying a tarifft. The resulting export price is P: The resulting import price is P= P+ t: The importing country imports M, which equals the exporting country's exports X. Show the optimal tariff is , where E; is the elasticity of export supply.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 7PA

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