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Hi, I was able to derive the foreign supply function and home demand function in world market as a function of the world price, but
Hi, I was able to derive the foreign supply function and home demand function in world market as a function of the world price, but I'm stuck at solving these. Can I get some help with detailed explanations?
Demand and supply in Foreign and Home market are characterized by the following functions, D*30 P*,S*2P*,D 120 P,andS=P where D, D*, S, and S * represent Home and Foreign demand and supply functions for a product called X, respectively, with P and P* denoting the local price of product X in Home and Foreign market, respectively. Calculate the free trade price of productX, together with the number of product X traded between Foreign and Home market at that free trade price. Free trade price = # of product X traded = Derivation: Now, Home government considers imposing a specic tariff of I (per unit) on imports. Derive the price of X in the world market and the amount of imports as functions of t. The price of X in the world market = The amount of X imports = DerivationStep by Step Solution
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