3. Both foreign (Sf) and domestic steel (Sd) producers supply the US market (Sd+f is the combined supply curve). a. In the left supply and demand diagram, insert dashed lines to show the price and quantity for 1) total domestic sales, 2) domestic producer sales, and 3) foreign producer sales. Equilibrium is at point E. Equilibrium price is $350 per ton. Equilibrium quantity is 65 million tons. US Steel Market without Tariff 10 Price per Ton in 100s USD 0 10 20 30 40 50 60 70 80 90 100 E' Quanity in millions of tons per year - D .Sd Sf Sd+fb. The US imposes a $200 per ton excise tariff on foreign steel imports to the US as shown in the right supply and demand diagram. Insert dashed lines to show the new price and quantity for 1) total domestic sales, 2) domestic producer sales, and 3) foreign producer sales (4 inserted lines in each diagram). Equilibrium is at point E' Equilibrium price is $450 per ton. Equilibrium quantity is 55 million tons. US Steel Market with Tariff Price per Ton in 100s USD 0 10 20 30 40 50 60 70 80 90 100 E' Quantity in millions of tons per Year -D. -Sd -Sf -Sd+f c. By examining the charts, what is the approximate price of steel before and after the imposition of the tariff (be careful to use the correct units)? Answer: Approximate price of steel before the tariff is imposed = $350 per ton. d. How much of the $200 per ton tariff is paid by domestic consumers of steel? Answer: Increase in equilibrium price that the consumer would pay is from $350 per ton to $450 per ton. This means we have increase of $100 per ton in price being paid by domestic consumers. Thus out of $200 per ton tariff, $100 per ton is being paid by domestic consumers of steel. e. How is the quantity of steel consumed in the US affected? Answer: Steel production decreases from 65 million tons to 55 million tons per year. f. How much steel did domestic producers sell before and after the imposition of tariffs?g. How much did foreign producers sell before and after the imposition of tariffs