Suppose that in the domestic market for computer chips the demand is Pd = 110 Qd, where

Suppose that in the domestic market for computer chips the demand is Pd = 110 ˆ’ Qd, where Qd is the number of units of chips demanded domestically when the price is Pd. The domestic supply is Ps = 10 + Qs, where Qs is the number of units of chips supplied domestically when domestic suppliers receive a price Ps. Foreign suppliers would be willing to supply any number of chips at a price of $30. The government is contemplating three possible policies:
Policy I: The government decides to ban imports of chips.
Policy II: Foreign suppliers are allowed to import chips (with no tariff).
Policy III: The government allows imports, but imposes a tariff of $10 per unit.
Fill in the table below, giving numerical answers.

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PolicyI Ban Imports No Tariff Import Tariff PolicyI Policy III Policy How many units of chips would be consumed domestically? How many units of chips would be produced domestically? What is the size of domestic producer surplus? What is the size of consumer surplus? What is the size of government receipts?