Question
Egypt has the demand and supply functions for product X; P=2+3.Q s P=56-6.Q D P shows 1000 USD per tonnes of product X and Q
Egypt has the demand and supply functions for product X;
P=2+3.Qs P=56-6.QD
P shows 1000 USD per tonnes of product X and Q shows quantity demanded and supplied in tonnes.
Product X is freely traded in world market at P=14(000) per tonne. Egyptian government allows for free trade at first but then adds a tariff of 3(000) USD.
Question: Calculate the producer surplus after the tariff.
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Macroeconomics Principles Applications and Tools
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez
9th edition
978-0134089027, 134089022, 978-0134420684
