5. The U.S. demand for tomatoes is summarized by the function = 1200 . There are currently 49 identical, profit-maximizing domestic tomato farmers in the U.S., each with the cost function () = 72 + 0.5 2 .

a. Explain why the total domestic supply curve will be = 49?

b. What is the price and quantity at which the domestic market will clear?

c. Now assume that the world price of the same tomatoes is $10 per kilogram, and the US can import tomatoes from the rest of the world. What would be the new price of tomatoes?

d. How many tomatoes would be produced by domestic farmers and how many tomatoes will be imported Draw graph

e. What do you think will happen to the US tomato farmers in the long run?

f. Suppose the government imposes a tariff of $2 on imported tomatoes? Calculate the following. i. New price of tomatoes in the US ii. What is the quantity imported and what quantity is produced by domestic farmers? iii. What is the government revenue collected? iv. What is the deadweight loss associated with this tariff?