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Suppose the world price for a good is 40 and the domestic demand and supply cureves are given as:
Demand: P=80-2Q
Supply: P=5+3Q
A) How much is consumed?
B) How much is produced at home?
C) What are the values of consumer and producer surplus?
D) If a tariff of 10 percent is imposed, by how much do consumption and domestic production change?
E) What is the change in consumer and producer surplus?
F) How much revenue doe the government earn from the tariff?
G) What is the net national cost of the tariff?
The intensive development effort needed to expedite the introduction can be very expensive. Revenues and costs associated with the new product
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The initial price of a cup of coffee at a local gas station on is $1, and at that price, 400 cups are demanded each day. If the price falls to $0.90 a cup, the quantity demanded will increase to 500 cups a day.
A major advantage of production function is that it can be easily transformed into a linear function, and thus can be analyzed with the linear regression method.
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