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Take a look at the sugar market: US demand: Q=60-2/3 P US domestic supply: Q=P Also, the US could import any quantity from world producers at (US$) 10/cents per lb
a) In a scenario with free trade- what would be equilibrium price in US, also what would be consumer surplus and producer surplus?
b) Assume FDA changes its mind and opens her US to sugar imports; however the government wants to promote domestic sugar production by giving a subsidy of 15 cents/lb
What would be new equilibrium price and quantity?
How much is domestic produced and how much is imported?
What is new consumer surplus and producer surplus?
What is deadweight loss compared to the scenario in question a)?
What is the difference between an economic luxury and an economic necessity? Ans) An economic luxury is wasting land on pools huge garden, etc. An economic requirement is what y
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How do the five competitive forces in Porter's model affect the profitability of the overall industry? For example, in what way might weak forces increase industry profits, and in
ABSOLUTE ADVANTANGE \
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A) With asymmetric information, free markets may not lead to efficient outcomes because the market for a service or product may break down due to adverse selection. Explain what ad
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