The following figure shows the domestic market with the world price as $60 per gram. Where x axis is quantity in (thousands of grams) and the y axis is price in $ per gram. 200 Price -150 100 60 -50 Demand Supply 0 Quantity 50 150 Assume that the country has small producers which does not affect the world price. Now, suppose that the government of this country issues 300 permits which means that each permit allows each seller to sell 100 grams of units. Exporters from foreign country cannot sell the product without the permit. What is the maximum price that exporter is willing to pay? (a) $1500 (b) $3000 (c) $2500 200

The following figure shows the domestic market with the world price as $60 per gram. Where x axis is quantity in (thousands of grams) and the y axis is price in $ per gram. 200 Price -150 100 60 -50 Demand Supply 0 Quantity 50 150 Assume that the country has small producers which does not affect the world price. Now, suppose that the government of this country issues 300 permits which means that each permit allows each seller to sell 100 grams of units. Exporters from foreign country cannot sell the product without the permit. What is the maximum price that exporter is willing to pay? (a) $1500 (b) $3000 (c) $2500 200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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