2) Assume that the domestic supply and demand for a good are given by the following equations. Q= 400 - 30 P Q = 50 + 20P b. Imposing %25 tariff is much better than imposing a quota of 50 units, when net welfare cost is considered. Do you agree or disagree? When answering this question, assume that all the quota rents will be gained by the government.

2) Assume that the domestic supply and demand for a good are given by the following equations. Q= 400 - 30 P Q = 50 + 20P b. Imposing %25 tariff is much better than imposing a quota of 50 units, when net welfare cost is considered. Do you agree or disagree? When answering this question, assume that all the quota rents will be gained by the government.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter19: International Trade

Section: Chapter Questions

Problem 2.5P

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