Question

how do I get to x=140-2p=134-2p

Ma Har Har Qu G face Mo Rec Isso G sec G com – Car - Com CO HHO 5 COUH ackboard learn.xythos prod/5a33ed4744755/7398562?response-content-disposition=inline%3B%20filename%2A%3DUTF-8%27%27Lecture%25201 6. The US is the world's only consumer of widgets (US demand equals world demand). The US demand curve is given by: Pus = 70-3 The US domestic (inverse) supply curve of widgets is Pis = 10: The rest of the world's (inverse) supply curve of widgets is P. -10% Equilibrium requires that X =2s + lv a) In the absence of a tarifl Pus = P = p. Show that the inverse) supply curve facing the US (domestic plus rest of the world) is the following: p=10+

Answer 1

So, when US will impose a tariff of $3 on products from outside, Equilibrium price in US will be Pus, whereas since US is the only market, equilibrium quantity X=Qw+Qus and price will be Pus ,Pw=Pus-3 since supplier outside of US will get equilibrium price-3 as $3 will go to government in form of tariffs,

Now, Pus=10+Qus/2 or Qus=2Pus-20 or using Pw=Pus-3 or Pus=Pw+3 we get Qus=2(Pw+3)-20 or Qus=2Pw-14

Now Total US demand curve is given by, Pus=70-X/2 and X=140-2Pus putting Pus=Pw+3 we get ,X=140-2Pus=140-2(Pw+3)=134-2Pw