Determine equilibrium price and quantity under free trade

Reference no: EM13220027

Consider a competitive market served by many domestic and foreign firms. The domestic demand for thse firms' product is $Q^{4} = 500 -1.5P$ The supply function of the domestic furms is $Q^{SD} = 50 + 0.5P$ while that of foreign firms is $Q^{SF} = 250$

a. Determine the equilibrium price and quantity under free trade.

b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota.

c. Are domestic consumers better or worse off as a result of the quota?

d. Are domestic producers better or worse off as a result of the quota?

Reference no: EM13220027

Questions Cloud

What is profit associated with using third degree price : Cinema Theater has estimated the following demand functions for its movies: Daytime demand, QD = 400 - 50 PD Nighttime demand, QN = 200 - 20 PN The marginal cost of serving another customer is $5 and its fixed costs are $100.

Define greatest heat of vaporization : In each of the following groups of substances, pick the one that has the given property. Explain your reasoning for each.

Describe why do you think the ceo''s plan backfired : A well-known conglomerate that manufactures a multitude of noncompeting consumer products instituted a corporate-wide initiative to encourage the managers of its many divisions to share consumer demographic information.

Explain the origins of the strategic position of amazon : Discuss and analyze how Amazon has continued to preserve its competitive position refer to Barney looking insider for competitive advantage

Determine equilibrium price and quantity under free trade : Consider a competitive market served by many domestic and foreign firms. The domestic demand for thse firms' product is $Q^{4} = 500 -1.5P$ The supply function of the domestic furms is $Q^{SD} = 50 + 0.5P$ while that of foreign firms is \(Q^{S..

Determine what is the percentage change in output : Assume Firm Y's production function is given by the following Cobb Douglas equation: Q = 0.5 x L0.6 x K0.5 where L denotes labor and K denotes capital. a. Does the production function exhibit increasing, decreasing or constant returns to scale

Type of e-commerce business : Identify the business, with its website address, and any information about the company's management team and organizational structure.

What is the profit maximizing price for seasonal passes : Monopoly Rinks is the only ice skating facility in Mapleville. The next closest rink is about 100 miles away. It has determined that its demand curve is Q = 123 - 0.5P - 0.25 Pc + .01 Y where Q is the quantity of seasonal passes sold.

Compute the molarity of urea in a solution : Calculate the molarity of urea in a soln prepared by dissolving 16 g of urea (MM= 60.0 g/mol) in 39 g of H20. The density of the soln is 1.3 g/ml.

User Account

All Pages