How much revenue does the tariff raise for the govt

Reference no: EM13232002

Suppose the demand for computers by Taiwanese consumers is given by
P=6,000 - 2 D Q ,
where QD is the annual quantity of computers demanded and P is the price
per computer in dollars.
The supply of computers by domestic Taiwanese producers is P = 2 S Q , where QS is the annual quantity of computers supplied.

a. Assuming that that the Taiwanese economy is closed to trade, find the equilibrium ```price and quantity in the Taiwanese computer market.

b. Assume the economy opens to trade. If the world price of computers is $1,500, find annual Taiwanese consumption, production, and imports of computers.

c. At the request of domestic producers, the Taiwanese government imposes a tariff of 500 per imported computer. Find Taiwanese consumption, production, and imports of computers after the imposition of the tariff. How much revenue does the tariff raise for the government.

Reference no: EM13232002

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