Calculate the deadweight loss-prohibtive tariff per unit

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Reference no: EM13801128

Suppose the market for wine in the U.S is characterized by :

Qd = 100-20P (demand)

Qs = 20+20P (Supply )

the market for wine in the rest of the world is characterized by :

Qd = 80-20P (Demand)

Qs = 40+20P (Supply)

Calculate the deadweight loss if the U.S Imposes a prohibtive tariff per unit of imported wine

(Note : P = price per unit; Qd = billions of units demanded; Qs = billions of units supplied)

Reference no: EM13801128

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