Answer to Question #42268 in Macroeconomics for oosha
Suppose that the price per unit is of a cellphone on the world market is 1 USD. Consider the following economy where the domestic supply of cellphones is given by Qs = 10p, the demand for cellphones is Qd = 60-10p where p is the domestic price. How many cellphones does the whole country produce and consume in autarky and at what price?
If there is free trade, how many cellphones will be imported?
Suppose there is a quota which is imposed on imports so the quantity imported is restricted to 10 units only. Calculate the specific tariff that would achieve the same level of imports of 10 units.