3. Trade between countries [12 TOTAL POINTS] Suppose the government of the U.S. wants to protect the domestic sugar industry by restricting sugar imports. Suppose the U.S. produces sugar domestically according to the supply curve Q3 = p, and suppose the domestic demand for sugar is Q9 = 8 7 p. The world price of sugar is $2. For price of sugar, the units are 53/ 1b., and for quantity of sugar, the units are 1,000,000 lbs. / year. c a. What is the equilibrium price and quantity of sugar in the U.S. market when there is no trade? What is the equilibrium price and quantity of sugar when the U.S. opens its market to trade? How much is produced domestically? Will the US be importing or exporting sugar? [4 points] 0 b. Suppose the U.S. imposes a tariff of $1 per pound of sugar on imports. What is the equilibrium price and quantity of sugar with the tariff? Give exact numbers for the: i. Tax revenue ii. Deadweight loss iii. Consumer surplus before the tariff iv. Consumer surplus after the tariff v. Producer surplus before the tariff vi. Producer surplus after the tariff 0 Based on these numbers, who wins and who loses from the tariff? [8 points]