Suppose the domestic market demand for steel is given as P = 220 - 2Q and domestic supply is given as P = 10 + Q.

A.If the world price is $150, what would the gains from trade be from opening the economy to the international market?

B.Suppose instead that the world price is $50. How much worse off are producers at this price than at $150?

C.The government is considering imposing a tariff of $20 on steel imports. How would the entire market be affected relative to free trade at the world price of $50?

D.A representative of the Australian steel 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.