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Suppose that, in the market for apples, domestic demand is given by P = 30 - 0.5Q, and domestic supply is given by P =

Suppose that, in the market for apples, domestic demand is given by P = 30 - 0.5Q, and domestic supply is given by P = 1.5Q, where Q represents tonnes of apples. Further suppose that the world price of apples is $6 per tonne.

A. On a graph, illustrate the market equilibrium if the market is open to international trade. Calculate the gains from trade in this market and label the corresponding area on the graph.

B. Suppose that the government is considering imposing a tariff of $4 per tonne on imported apples. Calculate the deadweight loss associated with the tariff.

C. A representative of the Australian apple growers' industry association is recommending that the government proceed with the tariff, saying the following: "A tariff will be a win-win for the government. It will raise government revenue and create jobs at the same time." Explain whether you agree with the representative's assessment and whether you would recommend imposing the tariff.

Note= Please draw the graph on a piece of paper and attach.

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