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Solve clearly Scenario 1: The domestic market demand and supply of wheat in Italy is given by: Market = -15P + 120 Q Market =
Solve clearly
Scenario 1: The domestic market demand and supply of wheat in Italy is given by: Market = -15P + 120 Q Market = 5P + 20 P 2 0 denotes the domestic price of one kg of wheat in Italy. 28. Refer to Scenario 1: Assuming Italy is a closed economy, what is the price of wheat in Italy (i.e., the equilibrium price)? 29. Bonus question. Refer to Scenario 1: Assuming Italy is a closed economy, what is the maximum possible total surplus in the wheat market in Italy? 30. Refer to Scenario 1: Now assume Italy opens the economy for trade and assume world price of one kg of wheat is 1 euro. What is the number of imports in the wheat market? 31. Refer to Scenario 1: Now assume Italy opens the economy for trade and assume world price of one kg of wheat is 1 euro. How much are the welfare gains from trade in the wheat marketStep by Step Solution
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