Question: See if you can devise a similar proof to show that the optimal import tariff, where a country has monopsony power, is 1/P e s

See if you can devise a similar proof to show that the optimal import tariff, where a country has monopsony power, is 1/Pes (where Pes is the price elasticity of supply of the import).

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In Figure 2410 the optimum tariff rate is P 3 P 2 P 2 1 ie MC P P 2 Price elasticity of ... View full answer

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