Based on the following scenario, answer questions 6a, 6b, 6c, 6d, and 6e:

Barriers to Trade Scenario:You own Steelco, a U.S.-based company that produces steel. You and other U.S.-based steel producers have been losing customers to Chinese producers, who charge a lower price for their steel. One of the other steel companies convinced the U.S. government to impose a tariff on Chinese steel, and you want to identify how the tariff will impact how much steel you should produce.

Information:

• Chinese Steel
  • Current price of Chinese steel per metric ton = $600
  • Tariff = $500 added per metric ton of Chinese steel imported into the U.S.
  • Price of Chinese steel per metric ton after the tariff = $1,100
  • Current quantity of Chinese steel imported from China to the U.S. each year = 2 million metric tons
• All other U.S. steel producer
  • Without the tariff and with China producing 2 million metric tons of steel at $600 all other steel manufacturers would produce = 1 million metric tons of steel.
  • Without China in the market, it estimated that all other U.S. steel manufacturers will produce 2.5 million metric tons of steel at an equilibrium price of $900/metric ton of steel.
  • a)Draw a supply and demand curve showing the supply and demand for U.S.-produced steel before and after the tariff.
  • b)What is the estimated equilibrium price of U.S. steel without imported Chinese steel?
  • c)What is the estimated quantity of U.S.-produced steel without imported Chinese steel?
  • d)Identify and explain who will make and lose money from this tariff.
  • e)Identify people and organizations that benefit from and suffer because of the tariff . Include how the tariff will impact your company.
  • f)Choose your favorite economic topic from the first half of the semester and explain how what you have learned will help you in the future.