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The country of Tajikistan is small and cannot influence world prices. And it imports peanuts for 1 0 TL per kilo. Demand curve D =

The country of Tajikistan is small and cannot influence world prices. And it imports peanuts for 10 TL per kilo. Demand curve D= 400-10P and Supply curve S=50+5P. The country of Tajikistan decides to impose a customs tariff of 5 TL per kilo on peanuts.


a) Calculate the net cost (efficiency loss) of the customs tariff Application. (10 points)

b) Calculate the revenue obtained by the country Tajikistan from the tariff. (5 Points)

c) If the country of Tajikistan applied a tariff that reduced imports to zero, how many TL would it be per kilo? (5 Points)

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