Suppose the world price (PW) of shoes is K20.00 per pair.
To produce a shoe, it takes K12.00 worthy of leather at free trade to make a pair.
Suppose country A levies a norminal tariff rate on shoes of 30%.
(a). calculate the effective rate of protection if leather is imported duty free.
(b). Calculate the effective rate of protection if leather is imported at 20% norminal tariff rate..

Answer rating: 100% (QA)

Effective Rate of Protection ERP Calculations Assumptions World price of shoes PW K2000 per pair Lea... View the full answer