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Business, 28.11.2019 05:31 mprjug6

Asmall country can import a good at a world price of 10 per unit. the domestic supply
curve of the good is
s= 20 +10 p
the demand curve is
d = 400- 5 p
in addition, each unit of production yields a marginal social benefit of 10.
a. calculate the total effect on welfare of a tariff of 5 per unit levied on imports.
b. calculate the total effect of a production subsidy of 5 per unit.
c. why does the production subsidy produce a greater gain in welfare than the tariff?
d. what would the optimal production subsidy be?

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Asmall country can import a good at a world price of 10 per unit. the domestic supply
curve of...
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