Calculate the change in consumer surplus after the tariff

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Reference no: EM13772502

Consider a large country importing good X in the international market. The country is large enough to influence the international price for good X. Let the initial international price of good X be $100, where the country imports 100 units and produces 10 units. The government decides to impose 30% tariff on good X to protect domestic producers and jobs. After the tariff, the country imports 80 units and produces 20 units. The price that foreign producers receive after the tariff (when they sell it to this country) is $85 (note that this price is different from the market price in this country).

A) Draw demand and supply curves for good X for this country.

B) Calculate the change in consumer surplus after the tariff.

C) Calculate the change in producer surplus after the tariff.

Reference no: EM13772502

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