What are the current equilibrium values

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Reference no: EM131098381

The market for all-leather men's shoes is served by both domestic (U.S.) and foreign (F) producers. The domestic producers have been complaining that foreign producers are dumping shoes onto the U.S. market. As a result, Congress is very close to enacting a policy that would completely prohibit sales by foreignmanufacturers of leather shoes in the U.S. market. The demand curve and relevant supply curves for the leather shoe market are as follows:

QD = 50,000 - 500P

QUS = 6000 + 150P

QF = 2000 + 50P,

where Q = thousands of pairs of shoes per year, and P = price per pair.a. Currently there are no restrictions covering all-leather men's shoes.

What are thecurrent equilibrium values?

b. Calculate the price and quantity that would prevail if the proposed policy is enacted.

c. Sketch a diagram that analyzes the economic welfare implications of the proposedpolicy.

Reference no: EM131098381

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