Illustrate price change as well as changes to the quantity

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Reference no: EM13185487

The world price of wine is below the price that would prevail in the United States in the absence of trade.

a.) Assuming that American imports of wine are a small part of total world wine production, draw a graph for the U.S. market for wine under free trade.

b.) Now suppose that a tariff is place on the importation of wine into the United States to protect domestic wine producers. What does this do to the price?

c.) Draw a new diagram illustrating the price change as well as the changes to the quantity of imports.

Reference no: EM13185487

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