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An internationally traded good with a world price of 2 dollar sells in a market where domestic demand is D = 24-2p and domestic supply
An internationally traded good with a world price of 2 dollar sells in a market where domestic demand is D = 24-2p and domestic supply is S = 2p. Provide a Supply and Demand Diagram to illustrate how prices and quantities would be affected by a tariff of 2 dollars. What is the efficiency loss. What is the consumer surplus at world price and at tariff? What is producer surplus at world price and tariff? and What is Government Surplus at world price and tariff?
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