- Your Graphs Must Be Carefully Labeled And Show All Relevant Areas On The Domestic Market Market Demand Is Q 4 000 1 (40.52 KiB) Viewed 52 times
Your graphs must be carefully labeled and show all relevant areas. On the domestic market, market demand is Q = 4,000 -
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Your graphs must be carefully labeled and show all relevant areas. On the domestic market, market demand is Q = 4,000 -
Your graphs must be carefully labeled and show all relevant areas. On the domestic market, market demand is Q = 4,000 - 2P, and market supply is Q = 2P. a). Find the equilibrium price and quantity in the domestic market. With free trade, there is a world supply of this good available at a constant price of $481. Calculate and show the gain from trade on a graph (i.e. the change in the total surplus due to free trade) (10 pts) b). Now assume that there is a $50 tariff on the import of this product. Compared to the case of free trade, calculate the size of the deadweight losses. Show them on the graph and EXPLAIN why they exist. (10 pts)