Application Week 4

Application Week 4 - Application Week 4: Problem #11 Page...

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Application Week 4: Problem #11 Page 357 The following graph shows the demand curve (D) of a home country facing the foreign monopoly supplier of a good to the home country, the associated marginal revenue curve (MR), the foreign firm’s horizontal marginal cost curve when there is no tariff imposed by the home country (MC), and the foreign firm’s marginal cost curve plus the cost of the tariff when a specific tariff is imposed by the home country (MC + 1): Qd0 = 14, Qd1 = 10, Qs0= , Qs1 = , Pint = $12, P int (1+t) = 16 P2 =21 Assuming that average cost (AC) equals marginal cost: a. Indicate the price charged to home – country consumers by the foreign-monopoly supplier when there is no home – country tariff. b. Indicate the price charged to home – country consumers by the foreign – monopoly supplier when the home country tariff is in place. When tariff is in place the price charged is : $21.00 “Quantity produced for the home country
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This note was uploaded on 04/10/2011 for the course ECON 2001-1 taught by Professor Nickeyturner during the Spring '11 term at Walden University.

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Application Week 4 - Application Week 4: Problem #11 Page...

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