Question
Suppose that we are considering the domestic market for tires and live in Indonesia. Suppose also that the domestic Demand for tires is given by:
Suppose that we are considering the domestic market for tires and live in Indonesia. Suppose also that the domestic Demand for tires is given by: =902 And that the domestic Supply of tires is given by: =10+0.5 Suppose also that this tire market begins in autarky.
Suppose that instead of an import tariff, the Indonesian government wanted to implement in import quota that would generate the same change in Producer Surplus as the $7 tariff. Given that the change in Producer Surplus is $119 1. What is the size of this import Quota that generates this same change in Producer Surplus as the $7 Tariff? Show your work. [2 points]
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