HSC Stuff > HSC Economics
Economics - Tariffs
hermansia12 :
--- Quote from: helkit98 on October 29, 2016, 11:00:21 pm ---Makes much more sense, thank you so much!
This last part to the same question is also confusing
--- End quote ---
These questions are actually answered on the question thread just last night. You can find the answers here:
Economics Question Thread on page 11
The answer to this question is that with the tariff, the market price is at $15 with the overdemand at 40 million. So to have the same effect, we have to constrain 40 million of the good. This is equivalent to moving from the $25 (equilibrium) amount of 50 to 30 in supply and 50 to 70 in demand. This makes the market price $15 i.e $5 tariff so the answer is C
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