Given that there are two countries are interested in engaging in maize trade with each other...

 

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Given that there are two countries are interested in engaging in maize trade with each other Assume that country A has demand and supply conditions for maize represented as follows: Demand A: Q-100-4P and Supply A: Q=10+2P While, the demand and supply situation in country B, an excess supply country are as follows: Demand B: Q-56-4P and Supply B: Q=30+3P # Find the price difference between country A and B, and comment on the level of transfer cost that will permit trade between the two countries (4) b Find quantities traded ignoring transfer costs. (2) How will interregional trade affect maize consumers and producers in both countries compared to their situation in the absence of interregional trade, (6) What will be the welfare effect of introducing a fixed import tariff of $3 per unit? (8) Given that there are two countries are interested in engaging in maize trade with each other Assume that country A has demand and supply conditions for maize represented as follows: Demand A: Q-100-4P and Supply A: Q=10+2P While, the demand and supply situation in country B, an excess supply country are as follows: Demand B: Q-56-4P and Supply B: Q=30+3P # Find the price difference between country A and B, and comment on the level of transfer cost that will permit trade between the two countries (4) b Find quantities traded ignoring transfer costs. (2) How will interregional trade affect maize consumers and producers in both countries compared to their situation in the absence of interregional trade, (6) What will be the welfare effect of introducing a fixed import tariff of $3 per unit? (8)

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1 Find the equilibrium price and quantity in country A without trade Equate demand and supply 100 4P ... View the full answer