Assume that all tabiets are identical goods, and that the market is competitive. The demand for tabiets from users in Europe is given by the demand curve Q = 300 - 2P; and the supply of tabiets from European manufacturers is given by the supply curve Q = 20 + 8P; where the price P is measured in hundreds of euros and the quantities Q are measured in milions. The market for tablets in Europe is large enough to influence the worid price. The export supply curve of foreign manufacturers selling in the European market is given by Q = 20P – 20. 1. What would be the price of a tablet in Europe if imports were banned? 2. If tabiets can be imported freely into Europe: (a) What is the equilibrium price of tablets in the European market? (b) What are the quantities consumed, produced, and imported in the European market? (C) What are the resuiting consumer, producer, and total social surpluses in Europe?

Assume that all tabiets are identical goods, and that the market is competitive. The demand for tabiets from users in Europe is given by the demand curve Q = 300 - 2P; and the supply of tabiets from European manufacturers is given by the supply curve Q = 20 + 8P; where the price P is measured in hundreds of euros and the quantities Q are measured in milions. The market for tablets in Europe is large enough to influence the worid price. The export supply curve of foreign manufacturers selling in the European market is given by Q = 20P – 20. 1. What would be the price of a tablet in Europe if imports were banned? 2. If tabiets can be imported freely into Europe: (a) What is the equilibrium price of tablets in the European market? (b) What are the quantities consumed, produced, and imported in the European market? (C) What are the resuiting consumer, producer, and total social surpluses in Europe?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.8P

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