Show your work when you answer the following questions. Suppose that the world price for a good
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Question:
Show your work when you answer the following questions. Suppose that the world price for a good is P w = 80 and the domestic demand & supply curves are given by the following equations:
P = 200 – 0.05QD
P = 20 + 0.05QS
1. If there is no protection,
a. How much is consumed (quantity demanded), how much is produced at home, and what is the quantity imported/exported?
b. Calculate the consumer surplus and the producer surplus.
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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