Question

Suppose that domestic demand in the market for good X is given by the equation Qd...

Suppose that domestic demand in the market for good X is given by the equation

Qd = 60 - P. And that domestic supply in the market for good X is given by the equation Qs = 2P

Suppose the world price is $10 and the country allows free trade.

  • What is consumer surplus with free trade?

Suppose the government imposes a $5 tariff on imports.

  • What is the gain to suppliers from this tariff?
  • What is the gain to suppliers from this tariff
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