Question
The nation of Narnia is small, unable to affect world prices. It imports apples at the price of $10 per bag. The demand curve is
The nation of Narnia is "small", unable to affect world prices. It imports apples at the price of $10 per bag. The demand curve is D = 600 - 10 P and the supply curve is S = 50 +5P. Consider an impot quota that limits imports to 100 bags.
Q1) The domestic price in Narnia will increase to _______________
Q2) The loss in consumer surplus is ______________
For the question one, the answer i got is $30, but the answer is $25. I am so confused about $25 because no matter how i calculate, I kept getting $30. Also the second one, I got $6235 but the answer is $8000. So, the detailed calculation process for these two questions would be a great help!
Thanks in advance!
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