Compute the amounts supplied by domestic and foreign

Reference no: EM131072180

The domestic demand for bicycles is given by P = 36-0.3Q. The foreign supply is given by P = 18 and domestic supply by P = 16+0.4Q.

(a) Illustrate the market equilibrium on a diagram, and compute the amounts supplied by domestic and foreign suppliers.

(b) If the government now imposes a tariff of $6 per unit on the foreign good, illustrate the impact geometrically, and compute the new quantities supplied by domestic and foreign producers.

Reference no: EM131072180

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