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Imposing a tariff - numerical

  1. If the demand function is Qd = 170-5P and the supply function is Qs = -30+15P, calculate the figures for quantity demanded and quantity supplied for prices from $1 to $20.
  2. Use these figures to plot the supply and demand curves. What is the equilibrium price and quantity?
  3. The world price is $6, plot this on your supply and demand diagram.
  4. The government imposes a tariff of $2. Illustrate the impact of this on your diagram.
  5. Calculate the following:
    1. Domestic firm's revenue before and after the tariff
    2. Overseas firm's export revenue before and after the tariff
    3. Consumer expenditure before and after the tariff
    4. The government's revenue from the tariff
  6. Evaluate the impact of the tariff on domestic firms and consumers.