Steel is traded in a highly competitive world market, and the world price is $160 per ton. Unlimited quantities are available for import into the United States at this price. The supply of steel from domestic U.S. mines and mills can be represented by the equation:

Q^S= (4/5)P

whereQ^Sis the quantity supplied in tons andPis the domestic price.

The domestic demand for the metal is given as:

Q^D= 994 - 2P

whereQ^Dis the quantity demanded in tons.

In recent years the U.S. industry has been protected by a tariff of $200 per ton. Under pressure from foreign governments, the United States plans to reduce this tariff to zero.

a. Under the $200 tariff, what was the U.S. domestic price of steel?

b. If the United States eliminates the tariff, what will be the increase in the level of imports?