Consider a competitive market served by many domestic and foreign firms. The domestic demand for these firms' product is Qd=700-1.5P. The supply function of the domestic firms is Qsd=50+0.5P, while that of the foreign firms is Qsf=200. a. Determine the equilibrium price and quantity under free trade. b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota.
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Consider a competitive market served by many domestic and foreign firms. The domestic demand for these firms' product is Qd=700-1.5P. The supply function of the domestic firms is Qsd=50+0.5P, while that of the foreign firms is Qsf=200.
a. Determine the
b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota.
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- Consider a competitive market served by many domestic and foreign firms. The domestic demand for these firms’ product is Qd = 600 − 2P. The supply function of the domestic firms is QSD = 200 + P, while that of the foreign firms is QSF = 250. a. Determine the equilibrium price and quantity under free trade. b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota. c. Are domestic consumers better or worse off as a result of the quota? d. Are domestic producers better or worse off as a result of the quota?Home's demand curve for wheat is P = 10 - (1/20)Qd. Its supply curve is P = 4+ (1/20)Qs Foreign's demand curve for wheat is P * = 8 - (1/20) Qd* Its supply curve is P* = 2+(1/20)Qs* Determine the effect of the tariff on Home import-competing producers APS = Home consumers ACS = Home government tariff revenue AGR= Adding these effects together AWAPS + ACS + AGR =Suppose a domestic market in a country is perfectly competitive. The domestic market is small and cannot influence the international price. Assume the country imports from the international market. Which of the following is correct about the effect of an import quota? Group of answer choices A) Increases domestic producer surplus B) Increases import quantity C) Increases total surplus in the domestic market D) Decreases total domestic quantity supplied E) None of the above
- China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…Question 12 One of Morocco's top import goods is wheat. Domestic market demand is described as Qn = 69 – 3P, and domestic producers supply wheat according to the function Qs = (5/6)P, where Q is measured in millions of bushels. The perfectly competitive world price of wheat is $6 per bushel. million bushels of wheat are imported under the competitive world price. Suppose the Moroccan government introduces an import quota equal to 23 million bushels of wheat. The new price is $_ per bushel of wheat. million. You must draw and label a graph that As a result of this import quota, domestic producers gain $. enables the TA to follow all of your intermediate steps. Suppose the Moroccan government wanted to achieve the same outcome (reduce imports to 23 million bushels of wheat) with a tariff instead. Relative to the import quota equilibrium, a tariff would cause market efficiency to _million. You must add on to your existing graph to help (increase/decrease/be the same) by $_ the TA to…A foreign firm sells smartphones to a home country. The demand for smartphones in the home country is given by the demand curve: Qd = 100 - 2P. The foreign firm ahs marginal cost of production of MC = 2 + Q and MR = 50 - Q. A) Calculate the equilibrium price and quantity of smartphones sold in the foreign market. Now, assume the home country opens for trade and has vertical import demand (and MR*) at P^x = $30. Assume the foreign firm will price discriminate. B) Calculate the firms overall output. C) Calculate the quantity and price in the foreign market. D) Calculate the quantity and price in the home market.
- Consider a large country with the following inverse demand and supply functions of golf clubs: P = 100 - Q. P = 20 + Q. The world price of golf clubs is 80. This country's government decided to support domestic golf club producers and introduced an export subsidy of 20, which led to a decrease in the world price to 70 per club. The world's deadweight loss, associated with this subsidy is then equal toThe analysis of a quota implies that .... please select one or more : a) The effect of a quota on trade is the same as a tariff. b) A quota will cause the same deadweight losses as a tariff. c) States should prefer quota instead of tariff. d) A quota increases imports if it is associated with high price elasticity of demand. e) When a quota is applied, the consumer surplus decreases but the producer surplus does not increase because only the state benefits from the quota.Consider two countries, i = {Spain, France} each having the following inverse demand function: P = 20 − 2Q Assume that there is only one firm in each country with the following cost function: TC = 2q Transport costs are absent. a) Start by considering a situation of autarky. Determine the equilibrium quantity and price in Spain. b) Compute total welfare in Spain under autarky (the sum of the consumer and producer surpluses). c) Now suppose that Spain opens up to international trade. Firms compete in quantities and transport costs are absent. In equilibrium determine (i) the quantity sold by the Spanish firm in Spain; (ii) the quantity sold by the French firm in Spain; (iii) the quantity sold by the Spanish firm in France; and (iv) the price of the good in Spain. d) Compute total welfare in Spain (the sum of the consumer and producer surpluses).
- Zenobia is a small country that takes the world price of barley as given. Its domestic supply and demand for barley are given by: D = 60 – 4P S = 4P – 12 7 euro for every bushel of barley Suppose the Zenobian government applies an import quota that limits imports to 12 bushels. a) Determine the quantity demanded, quantity supplied, and new domestic price with the quota. b) Calculate the quota rent. c) Assuming that quota licenses are allocated to domestic producers, what is the net effect of the quota on Zenobia's welfare? d) Assuming that quota rents are earned by foreign exporters, what is the net effect of the quota on Zenobia's welfare?A foreign firm sells smartphones to a home country. The demand for smartphones in the home country is given by the demand curve: Qd = 100 - 2P. The foreign firm ahs marginal cost of production of MC = 2 + Q. A) Calculate the equilibrium price and quantity of smartphones sold in the foreign market. Now, assume the home country opens for trade and has vertical import demand (and MR*) at P^x = $30. Assume the foreign firm will price discriminate. B) Calculate the firms overall output. C) Calculate the quantity and price in the foreign market. D) Calculate the quantity and price in the home market.1. The domestic demand (QD) and supply (Qs) for strawberries in Canada are given respectively by QD = 800 – 25P where P is the price per box of strawberries. and Qs = -40 + 5P a) What would be the equilibrium price and quantity if Canada could not trade with any other country for strawberries?