The United States imports about half of its petroleum needs. Suppose that the rest of the oil
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The United States imports about half of its petroleum needs. Suppose that the rest of the oil producers are willing to supply as much oil as the United States wants at a constant price of $25 a barrel. What would happen to the price of domestic oil if a tax of $5 a barrel were placed on foreign oil?
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Here the supply curve of foreign oil is flat at 25 Thus the price to the ...View the full answer
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