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The domestic supply curve




3. A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is S = 20 + 10P, D = 400 - 5P.;In addition, each unit of production yields a marginal social benefit of 10.;Now, suppose demand and supply are exactly as described in problem 3, but there is no marginal social benefit to production. However, for political reasons the government counts a dollar's worth of gain to producers as being worth $3 of either consumer gain or government revenue. Calculate the effects on the government's objective of a tariff of 5 per unit.;Additional Requirements;Level of Detail: Show all work


Paper#15397 | Written in 18-Jul-2015

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