The demand for TVs in a certain country is given by D = 25000 - 70P; where P is the

price of a TV. Supply by domestic TV producers is S = 15000 + 50P.

(a) Assuming that the economy is closed, find the equilibrium price and production

quantity of TVs.

(b) The economy opens to trade. The world price of a TV is $80. Find the domestic

quantities demanded and supplied and the quantity of imports or exports. Who will

support the opening of the TV market to trade and who will oppose it?

(c) The government imposes a tariff of $20 per TV. Find the effects on domestic

quantities demanded and supplied and on the quantity of imports or exports. Also find

the tariff revenue collected by government. Who will support the imposition of tariff

and who will oppose it?

(d) Suppose the government imposes an import quota of 1200 TVs. Find the equilibrium

price in the domestic TV market, as well as the quantities produced by domestic firms

and purchased by domestic consumers.