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At free-trade prices, a tennis racquet in Country A, a small country, sells for $100 and contains $40 worth of aluminium inputs and $30 worth
At free-trade prices, a tennis racquet in Country A, a small country, sells for $100 and contains $40 worth of aluminium inputs and $30 worth of plastic. The nominal tariff rates in Country A are 40 percent on tennis racquets, 20 percent on aluminium, and 10 percent on plastic. Based on this information, what is the effective rate of protection for the racquet industry in Country A? Show calculations.
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