{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Application Week 4

Application Week 4 - Application Week 4 Problem#11 Page 357...

This preview shows pages 1–2. Sign up to view the full content.

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. The price charged is 19.00, “The price charged will be 0p1” (Appleyard, Field, & Cobb, 2010). 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 drops to 0q2, and the price charged per unit is 0p2” (Appleyard, Field, & Cobb, 2010).

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

Application Week 4 - Application Week 4 Problem#11 Page 357...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online