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The domestic demand in a small open economy for portable radios is given by QD=5000-100P where price (P) is measured in dollars and quantity (Q)
The domestic demand in a small open economy for portable radios is given by QD=5000-100P where price (P) is measured in dollars and quantity (Q) is measured in thousands of radios per year. The domestic supply curve for radios is given by QS=150P. Suppose portable radios can be imported at a world price of $10 per radio. If domestic portable radio producers succeeded in getting $5 tariff implemented. What is the deadweight loss from the tariff? A. 2,500 B. 3,125 C. 1,875 D. 3,750
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