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The President of Riceland is very fond of rice and hence has given the license to produce rice only to her own nephew, Mr. Brown. Even the international trade in rice is not allowed. Following is the demand that Mr. Brown faces for rice: D=10-P. He faces a total cost, given by C = 3+Q+0.5Q². People of Riceland were revolting against this obsession for rice for their President, which, one day, eventually resulted in opening up of trade in rice, at the competitive world price level of 3 $. However, the obsession of rice for the President forced her to limit the amount of rice traded in the market to one unit, and she gave the license to trade to Mr. Brown only. Discuss the pattern of trade in rice for Riceland under free trade and restricted trade situations. Compare the profits/losses of Mr. Brown under the following four conditions and which will be the best scenario that he would like the President of Riceland to go for: (a) No trade situation; (b) Free trade situation; (c) Restricted trade, when from Riceland, only Mr. Brown can trade in the international market; (d) Tariff that will leave the quantity imported the same as under quota limit of one unit? If the President of Riceland is more concerned about national welfare, which of the above four situations she would choose?

The President of Riceland is very fond of rice and hence has given the license to produce rice only to her own nephew, Mr. Brown. Even the international trade in rice is not allowed. Following is the demand that Mr. Brown faces for rice: D=10-P. He faces a total cost, given by C = 3+Q+0.5Q². People of Riceland were revolting against this obsession for rice for their President, which, one day, eventually resulted in opening up of trade in rice, at the competitive world price level of 3 $. However, the obsession of rice for the President forced her to limit the amount of rice traded in the market to one unit, and she gave the license to trade to Mr. Brown only. Discuss the pattern of trade in rice for Riceland under free trade and restricted trade situations. Compare the profits/losses of Mr. Brown under the following four conditions and which will be the best scenario that he would like the President of Riceland to go for: (a) No trade situation; (b) Free trade situation; (c) Restricted trade, when from Riceland, only Mr. Brown can trade in the international market; (d) Tariff that will leave the quantity imported the same as under quota limit of one unit? If the President of Riceland is more concerned about national welfare, which of the above four situations she would choose?

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 31P: Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as...
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1. The President of Riceland is very fond of rice and hence has given the license to produce rice only to her own nephew, Mr. Brown. Even the international trade in rice is not allowed. Following is the demand that Mr. Brown faces for rice: D=10-P. He faces a total cost, given by C = 3+Q+0.5Q². People of Riceland were revolting against this obsession for rice for their President, which, one day, eventually resulted in opening up of trade in rice, at the competitive world price level of 3 $. However, the obsession of rice for the President forced her to limit the amount of rice traded in the market to one unit, and she gave the license to trade to Mr. Brown only. Discuss the pattern of trade in rice for Riceland under free trade and restricted trade situations. Compare the profits/losses of Mr. Brown under the following four conditions and which will be the best scenario that he would like the President of Riceland to go for: (a) No trade situation; (b) Free trade situation; (c) Restricted trade, when from Riceland, only Mr. Brown can trade in the international market; (d) Tariff that will leave the quantity imported the same as under quota limit of one unit? If the President of Riceland is more concerned about national welfare, which of the above four situations she would choose?
Transcribed Image Text:1. The President of Riceland is very fond of rice and hence has given the license to produce rice only to her own nephew, Mr. Brown. Even the international trade in rice is not allowed. Following is the demand that Mr. Brown faces for rice: D=10-P. He faces a total cost, given by C = 3+Q+0.5Q². People of Riceland were revolting against this obsession for rice for their President, which, one day, eventually resulted in opening up of trade in rice, at the competitive world price level of 3 $. However, the obsession of rice for the President forced her to limit the amount of rice traded in the market to one unit, and she gave the license to trade to Mr. Brown only. Discuss the pattern of trade in rice for Riceland under free trade and restricted trade situations. Compare the profits/losses of Mr. Brown under the following four conditions and which will be the best scenario that he would like the President of Riceland to go for: (a) No trade situation; (b) Free trade situation; (c) Restricted trade, when from Riceland, only Mr. Brown can trade in the international market; (d) Tariff that will leave the quantity imported the same as under quota limit of one unit? If the President of Riceland is more concerned about national welfare, which of the above four situations she would choose?
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