Suppose that from the free trade production point B, the nation of Figure 8.5 wants to produce
Question:
(a) How the nation could do this with a tariff or with a subsidy.
(b) Why the subsidy would be better.
Transcribed Image Text:
Pw = 1 2 PD = 1.6 60 Pw = 0.8 2' D 40 E' н 30 Н 15 25 30 50 60
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