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Assume that prior to the imposition of an importation fee the country annually consumed 9 0 0 million short tons of coal, all domestically mined
Assume that prior to the imposition of an importation fee the country annually consumed million short tons of coal, all domestically mined at a price of $ per short ton. How would the cost benefit analysis of the import fee change if after imposition of the import fee, the following circumstances are assumed to result from energy consumers switching from crude to coal?
a Annual consumption of coal rises by million short tons but the price of coal remains unchanged.
b Annual consumption of coal rises by millions short tons and the price of coal rises to $ per short ton. In answering this question, assume that the prices of other goods, including coal, were not held constant in eliminating the demand schedule for crude oil.
c Annual consumption of coal rises by million short tons and the price of coal rises to $ per short ton. In answering this question, assume that the prices of other goods, including coal, were not held constant in eliminating the demand schedule for crude oil.
d The market price of coal underestimates its marginal cost by $ per short ton because the coal mined in the country has a high sulfur content that produces smog when burned. In answering this question, assume that the annual consumption of coal rises by million tons, but the price of coal remains unchanged.
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