PROBLEM (6) (Optimal tariff setting without the small country assumption) US demand and supply for wheat are Q=120-p and Q=p respectively. The rest of the world ROW demand and supply for wheat are Q=240-4p and Q = 2p respectively. Suppose the US is imposing $t (per unit) tariff for imports from the rest of the world. What should the tariff t be, in order to maximize Tariff Revenues?

PROBLEM (6) (Optimal tariff setting without the small country assumption) US demand and supply for wheat are Q=120-p and Q=p respectively. The rest of the world ROW demand and supply for wheat are Q=240-4p and Q = 2p respectively. Suppose the US is imposing $t (per unit) tariff for imports from the rest of the world. What should the tariff t be, in order to maximize Tariff Revenues?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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