Calculate producer and consumer surplus in autarky

Reference no: EM131919473

Problem

Guatemala represents a small part of the world poultry market. Based on Figure 17P-2 answer the following.

a. Calculate producer and consumer surplus in autarky.

b. Assume that the world price of poultry is $0.30/kg. If Guatemala opens to trade, what is the domestic quantity consumed and produced? What is the quantity of imports?

c. Calculate the post-trade producer and consumer surplus. Who is better off after trade?

1637_Figure 17P-2.jpg

Reference no: EM131919473

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