Answer to Question #49757 in Other Economics for md
hello, i am struggling with this international EU economics question. 'The optimal tariff for a small country is zero. Prove this statement geometrically and then explain your results'
By definition, a "small country" is one that is unable to influence the price of a good on the world market through buying or selling. This assures that the country will have a horizontal world supply curve at the price PW, regardless of its tariff policy. When a small country applies a tariff to a good, the world price will remain constant at Pw. Tariff revenue will simply be a transfer from consumers to the government. If the country's demand curve is downward sloping, the deadweight cost will always increase proportionately to tariff increases, even if there is no domestic supply. So, the statement is true.
Hi Expert, so I wasn't able to try the new version because they closed of the submission portal. Oh well,
but I want to give you my sincerest thank you for helping me throughout this assignment! Honestly, you are an absolute legend! Your line by line explanation was superb and honestly helped me understand most of the concept I learnt during my semester better than my own lecturer! Thank you for consistently helping and being persistent with the versions!
You've honestly been the greatest help and I would have been so lost if it wasn't without your expertise!
So thank you once again!