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Now assume that the HC's government introduces an 0.8 (80cent) ex- port subsidy per unit exported. Find the domestic subsidy price, psd, the foreign subsidy
Now assume that the HC's government introduces an 0.8 (80cent) ex- port subsidy per unit exported. Find the domestic subsidy price, psd, the foreign subsidy price ps, and the quantity exported/imported with the export subsidy. 5. Determine the cost of the subsidy, the domestic DWL, the foreign DWL, the terms-of-trade transfer, the domestic change in welfare and the foreign change in welfare
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