Reference no: EM13706107
Answer questions below based upon the following information about country A's market
for its importable.
Country A's supply curve: P = 0.5Q
Country A's demand curve: P= 40 - 0.25Q
where P denotes price and Q denotes quantity
Suppose that country C would be willing to export the product to A for $15 per unitwhile country B, the low-cost world producer, is willing to export at a price of $10.
Similarly, let the lines (SB + tariff) and (SC + tariff) denote the domestic price of thproduct imported from countries B and C if the above tariff is imposed, respectively.
(a) Illustrate this market in country A on a demand and supply diagram. (Please shoW all the intercepts). Let the lines SB and SC denote the export supply curves to A's
market from countries B and C, respectively
(b) Under free trade, from whom country A import this product? How many unit will it import and what will be the domestic price of this product in country A?
(c) If A imposes a per unit tariff of $10 on imports from country B, from whom will it import this product? How many units will it import and what will be the
domestic price of this product in country A? Show your calculations and graph.
Let the lines (SB + tariff) denote the domestic price of the product imported from country B if the above tariff is imposed.
(d) If A imposes a per unit tariff of $10 on imports from country C, from whom will it import this product? How many units will it import and what will be the
domestic price of this product in country A? Show your calculations and graph.
Let the lines (SC + tariff) denote the domestic price of the product imported from country C if the above tariff is imposed.
(e) If A imposes a per unit tariff of $10 on imports from both B and C, from whom will it import this product? How many units will it import and what will be the domestic price of this product in country A? Show your calculations and graph.
Similarly, let the lines (SB + tariff) and (SC + tariff) denote the domestic price of the product imported from countries B and C if the above tariff is imposed,respectively.
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