The nation of Cologne is large, but unable to affect world prices. It imports chocolate at the

Question:

The nation of Cologne is “large,” but unable to affect world prices. It imports chocolate at the price of $20 per box. The demand curve is:

D = 700 - 10P.

The supply curve is S = 200 + 5P.

Determine the free trade equilibrium. Then calculate and graph the following effects on an import quota that limits imports to 50 boxes:

a. The increase in the domestic price.

b. The quota rents.

c. The consumption distortion loss.

d. The production distortion loss.

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Related Book For book-img-for-question

International Economics Theory And Policy

ISBN: 9781292409719

12th Edition

Authors: Paul Krugman , Maurice Obstfeld, Marc Melitz

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Question Posted: Feb 27, 2024 03:04 AM

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International Economics Theory And Policy

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