What is the equilibrium price in the row market

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Reference no: EM13208378

Suppose that the domestic lean hog industry can be characterized by the following equations.

QUSSupplied = ?33(3\5)+ 1(1\5)PriceUS

QUSDemanded = 67 + ?1(1\3)PriceUS

Suppose further that the lean hog industry for the rest of the world can be characterized by the following
equations.

QROW Supplied = ?40 + 1PriceROW

PriceROW = 7012+ ?1(1\2)QROWDemanded

Assume that prices in both markets are expressed in cents per lb..

(i) If there is no trade in this market between the US and the rest of the world, what is the equilibrium price in the US market?

(ii) If there is no trade in this market between the US and the rest of the world, what is the equilibrium price in the ROW market?

(iii) If there is unfettered trade between the US and the rest of the world, what is the equilibrium international price?

(iv) Going from no trade to unfettered trade, what is the change in consumer surplus in the US?

(v) Going from no trade to unfettered trade, what is the change in producer surplus in the US?

(vi) Going from no trade to unfettered trade, what is the change in consumer surplus in the ROW?

(vii) Going from no trade to unfettered trade, what is the change in producer surplus in the ROW?

(viii) Going from no trade to unfettered trade, what is the overall change in total surplus in this market?

(x) What quantity of lean hog is traded each period between the US and the ROW?

Reference no: EM13208378

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