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Hi! can you please explain e,f,g,h, and i? Thanks! Suppose the domestic supply (Qs) and demand (Qd) for MP3 players in the United States are
Hi! can you please explain e,f,g,h, and i? Thanks!
Suppose the domestic supply (Qs) and demand (Qd) for MP3 players in the United States are given by the following equations where P is the $ price of an MP 3 player: Qs=25+10PQd=8755P Also, assume the U.S. is currently engaged in trading with the rest of the world at a world price of $50. Recall that, at that price, the U.S. is importing 150 MP3 players with a CS of $39,062.50, a PS of $11,281.25 and a total welfare of $50,344. Now assume that the U.S. (a small country) imposes a tariff of $4. Following the tariff: a) What is the new domestic price of MP3 players in the United States? b) What is the new quantity of MP3 players produced (Qs) in the United States? c) What is the new quantity of MP3 players sold (Qd) in the United States? d) How many MP3 players will the U.S. import from abroad? e) What is the new Consumer surplus in the MP3 market in the United States? f) What is the new Producer surplus in the MP3 market in the United States? g) How much government revenue will the tariff generate? h) Now, what is total welfare in the United States? i) Compared to prior to the welfare, what has happened to aggregate U.S. welfare (Increased/Decreased)? Answer 1: 1 Suppose the domestic supply (Qs) and demand (Qd) for MP3 players in the United States are given by the following equations where P is the $ price of an MP 3 player: Qs=25+10PQd=8755P Also, assume the U.S. is currently engaged in trading with the rest of the world at a world price of $50. Recall that, at that price, the U.S. is importing 150 MP3 players with a CS of $39,062.50, a PS of $11,281.25 and a total welfare of $50,344. Now assume that the U.S. (a small country) imposes a tariff of $4. Following the tariff: a) What is the new domestic price of MP3 players in the United States? b) What is the new quantity of MP3 players produced (Qs) in the United States? c) What is the new quantity of MP3 players sold (Qd) in the United States? d) How many MP3 players will the U.S. import from abroad? e) What is the new Consumer surplus in the MP3 market in the United States? f) What is the new Producer surplus in the MP3 market in the United States? g) How much government revenue will the tariff generate? h) Now, what is total welfare in the United States? i) Compared to prior to the welfare, what has happened to aggregate U.S. welfare (Increased/Decreased)? Answer 1: 1Step by Step Solution
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