Palm oil is produced and consumed in Nigeria. The autarky price of palm oil is N100, Nigeria producers of palm oil produce 500 tons of palm oil and consumers consume 500 tons of palm oil. The free trade price of palm oil is N20. To protect domestic production and jobs, the Nigerian government imposes a 20 percent ad-valorem tariff on imported palm oil. Using partial equilibrium analysis and a well-drawn diagram, explain the impact of this policy decision. 

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Here is the analysis using a partial equilibrium diagram Before the tariff Autarky price of palm oil ... View the full answer