I really need help with letter
e. If anyone can help
Homework Answers
e).
Consider the given problem here the initial price is given by “Pw”. Now, if tariff is imposed by the amount of the externality, => the new price is given by “Pw+externality”. So, consumption decreases to “Q3” and the domestic production increases to “Q2”. So, here the consumer surplus decreases by the area “L+K+M+N+O” and the producer surplus increases by the area “L+K” and the tariff revenue is given by “N”. So, the change in the social welfare is given by.
=> change in social welfare = (L+K)+N-( L+K+M+N+O), => change in social welfare = -(M+O) < 0. So, here the social welfare decreases.
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I really need help with letter
e. If anyone can help
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you.
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revenue it would raise for the Government. This is based on a Micro
Economics 304 question and I could really use some help with the
math. It is a bit to vague for me to figure out on my own, thank
you.
P.S. I really need this figured out by 03/21.
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