Question
After intense lobbying by domestic typewriter manufacturers, the government decides to ban all trade in typewriters, so that the typewriter industry exists in autarky.
After intense lobbying by domestic typewriter manufacturers, the government decides to ban all trade in typewriters, so that the typewriter industry exists in autarky. On the copy of the graph shown below, shade in the region representing deadweight loss from autarky. ) Explain in words why there is deadweight loss in the market under autarky even though the price and quantity of production will be where the domestic demand curve intersects the domestic supply curve.
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Microeconomics An Intuitive Approach with Calculus
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