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Suppose Qd=-44*P+837, Qs=37*P+10 for home and Qd*=-44*P+167, Qs*=37*P+32 for foreign. Further suppose that the importing country...

Suppose Qd=-44*P+837, Qs=37*P+10 for home and Qd*=-44*P+167, Qs*=37*P+32 for foreign. Further suppose that the importing country place a tariff of 0.20 on the product. What is the price paid by the importing country to two decimal places?

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Answer #1

Here, lets assume Home imports and foriegu exports. Tariff of 0.20 will increase price in home from P to 1. 20P.For home import function! Import & Qd - Qs = (-44x1.20 P) +8 37 - (37 x 1:20p)- 10. = -52.8P - 44.4P +827 Imports 2 - 97. 2P+The answer is 6.48

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