Essay
The current domestic demand for steel is P = 150 - 2Q and the current supply is given by P = 30 + Q. The world steel price is $40. The government decides to repeal the $10 tariff on steel.
i)What is the impact of this bill? Specifically, what will be the change in domestic consumer surplus and producer surplus?
ii)What will be the loss in government revenue from not collecting the tariff and how many more units will be imported?
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i)With the tariff the domestic price is ...View Answer
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