Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
The domestic supply and demand curves for washing machines are as follows: Supply: P= 2800+5Q Demand: P=4300-50 where P is the price in dollars and the Q is the quantity in millions
The domestic supply and demand curves for washing machines are as follows:
Supply: P= 2800+5Q
Demand: P=4300-50
where P is the price in dollars and the Q is the quantity in millions. The U.S. is a small producer in the world washing machine market. Where the current price (which will not be affected by anything we do) is $ 3,000. Congress is considering a tariff of $500.
A. Calculate and graph all points for the domestic market for washing machines price and quantity equilibrium.
B. Find the domestic quantity demanded and supplied of washing machines that will result if the price imposition of $3,000 is imposed. Show on graph.
Explain. C. Find the domestic quantity demanded and supplied of washing machines that will result if the $500 tariff is imposed. Show on graph.
Explain. D. Compute government revenue from the tariff.
Expert Solution
Answers:
(A). Initially, the equilibrium is at pt. E where, equilibrium price = $ 3550 and equilibrium qty. = 150 units of machines.
(B). If we consider, Price imposition of $ 3000 then, Qty. Demanded of machines = 260 units of machines, and, Qty. Supplied of machines = 40 units of machines.
(C). If tariff of $ 500 is imposed, then, price would be $ 3500. And, Qty. Demanded of machines = 160 units of machines, and, Qty. Supplied of machines = 140 units of machines.
(D). Therefore, govt. revenue from tariff = Area of shaded rectangular region
= 500 x 20
= $ 10,000.
PFA
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
