The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price (Pw) of limes is $800 per ton and is displayedas a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any onecountry does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes.Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.PRICE (Dollars per ton)PRICE (Dollars per ton)11201080104010009609:2088064080076072096092088084080076072000Domestic Demand10I20TI10 20Domestic Supply70605030 40QUANTITY (Tons of limes).30 40 50 60 70QUANTITY (Tons of limes)80A tariff set at this level would raise $8090100PW90 100If Bangladesh is open to international trade in limes without any restrictions, it will importSuppose the Bangladeshi government wants to reduce imports to exactly 20 tons of limes to help domestic producers. A tariff of Sachieve this.tons of limes.in revenue for the Bangladeshi government.per ton will

Tariff revenue from import is the product of import quantity and tariff per unit. That is , Tariff…

The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price (Pw) of limes is $800 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 1120 Domestic Demand Domestic Supply SZ as per ton) 1060 1040 1000 960

The following graph shows the domestic demand for and supply of limes in Bangladesh. The world price (Pw) of limes is $800 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 1120 Domestic Demand Domestic Supply SZ as per ton) 1060 1040 1000 960

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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