FIGURE 14.3 Price A Cartel as a ($ per barrel) Profit- Maximizing Monopoly 195 A Marginal-revenue curve 100 + - - B Marginal-cost curve (= supply curve if there Is competition) Maximum monopoly profits* 40 - - - - - - Demand - curve O. 30 49 Oil exports (millions of barrels per day)Suppose that the United States currently imports 1.0 million pairs of shoes from China at $20 each. With a 50 percent tariff, the consumer price in the United States is $30. The price of shoes in Mexico is $25. Suppose that, as a result of NAFTA, the United States imports 1.2 million pairs of shoes from Mexico and none from China. Question 1: Compute for change in consumer surplus (with solutions) Question 2: Compute for change in government revenue (with solutions) Question 3: Compute the net gain/loss in the US market for imported shoes (with solutions) FIGURE 14.3 Price A Cartel as a ($ per barrel) Profit- Maximizing Monopoly 195 Marginal-revenue curve 100 B Marginal-cost curve (=supply curve if there is competition) Maximum monopoly profits* 40 Demand curve 30 49 Oil exports (millions of barrels per day Question 4: If the cartel was just one of many firms competing in the oil exports market, which point would indicate the amount it exported and the price of its exports? Choices: A, B, C, or F Question 5: If the cartel was acting like a monopoly, which point would indicate the amount it exported and the price of its exports? Choices: A, B, C, or P Question 6: Calculate the maximum monopoly profits (with solutions)