The country of Widgetium is the only country in which consumers desire to consume widgets. Suppose the

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The country of Widgetium is the only country in which consumers desire to consume widgets. Suppose the domestic demand for widgets in Widgetium is Qd= 20 - 2P and the domestic supply is Qs= 5P - 7.5 both measured in millions of widgets. In addition, there is a perfectly inelastic supply of 2 million foreign widgets. What tariff on widgets maximizes domestic aggregate surplus?
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Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

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