### Derive the effective rate of protection or erp

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##### Reference no: EM131441901

Assume the following: the world price of shoes is \$100 per pair. The value of imported leather is 70% of the value of the shoes (or \$70). The tariff on shoes is 20% while the tariff on leather is 15%. Calculate the Values Added and use them to derive the Effective Rate of Protection or ERP.

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