Determine equilibrium price and quantity under free trade

Assignment Help Econometrics
Reference no: EM13220027

Consider a competitive market served by many domestic and foreign firms. The domestic demand for thse firms' product is \(Q^{4} = 500 -1.5P\) The supply function of the domestic furms is \(Q^{SD} = 50 + 0.5P\) while that of foreign firms is \(Q^{SF} = 250\)

a. Determine the equilibrium price and quantity under free trade.

b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota.

c. Are domestic consumers better or worse off as a result of the quota?

d. Are domestic producers better or worse off as a result of the quota?

Reference no: EM13220027

Questions Cloud

What is profit associated with using third degree price : Cinema Theater has estimated the following demand functions for its movies: Daytime demand, QD = 400 - 50 PD Nighttime demand, QN = 200 - 20 PN The marginal cost of serving another customer is $5 and its fixed costs are $100.
Define greatest heat of vaporization : In each of the following groups of substances, pick the one that has the given property. Explain your reasoning for each.
Describe why do you think the ceo''s plan backfired : A well-known conglomerate that manufactures a multitude of noncompeting consumer products instituted a corporate-wide initiative to encourage the managers of its many divisions to share consumer demographic information.
Explain the origins of the strategic position of amazon : Discuss and analyze how Amazon has continued to preserve its competitive position refer to Barney looking insider for competitive advantage
Determine equilibrium price and quantity under free trade : Consider a competitive market served by many domestic and foreign firms. The domestic demand for thse firms' product is \(Q^{4} = 500 -1.5P\) The supply function of the domestic furms is \(Q^{SD} = 50 + 0.5P\) while that of foreign firms is \(Q^{S..
Determine what is the percentage change in output : Assume Firm Y's production function is given by the following Cobb Douglas equation: Q = 0.5 x L0.6 x K0.5 where L denotes labor and K denotes capital. a. Does the production function exhibit increasing, decreasing or constant returns to scale
Type of e-commerce business : Identify the business, with its website address, and any information about the company's management team and organizational structure.
What is the profit maximizing price for seasonal passes : Monopoly Rinks is the only ice skating facility in Mapleville. The next closest rink is about 100 miles away. It has determined that its demand curve is Q = 123 - 0.5P - 0.25 Pc + .01 Y where Q is the quantity of seasonal passes sold.
Compute the molarity of urea in a solution : Calculate the molarity of urea in a soln prepared by dissolving 16 g of urea (MM= 60.0 g/mol) in 39 g of H20. The density of the soln is 1.3 g/ml.

Reviews

Write a Review

Econometrics Questions & Answers

  Determine the present worth of the cranes repair costs

A construction company has purchased a crate that comes with a 3-year warranty. Repair costs are expected to average $3500 per year beginning in year 4 when the warranty expires. Determine the present worth of the crane's repair costs over its 15-..

  Determine fixed costs equal value of the last three digits

Given the above variable cost data and assuming fixed costs equal the value of the last three digits of your MDC student ID, create a file using Excel that lists Output, Fixed Cost, Variable Cost, Total Cost, Average Fixed Cost, Average Variable C..

  Compute the equilibrium price and quantity if income falls

If demand is represented by Qd = 50 -.5P +.005I where I is income and I=$50,000 and supply is represented by Qs = 100 +.4P - 2W where W is wages and W=$15.00. a) Compute the equilibrium price and quantity where wages=W=$15.00.

  How much value added is produced at acme us

Here once again is the basic data on revenue and costs for each firm when Acme U.S. makes and sells a car. The table shows the initial price that Acme U.S. pays Acme Mexico, $3,000 per engine. In some problems, you will be asked to consider how thi..

  What compensations schemes would alter the deadweight loss

With curves P=1000-10Q, TR=1000Q-10Q^2, MR=1000-20Q, MC=100+20Q, suppos in addition to the costs above, the director of the film has to be paid. The company is considering four options: 1. a flat fee of 2000 dollars 2. 50 percent of the profits 3.

  What was the real exchange rate between the uk

Suppose that last year, the nominal exchange rate between the Japanese yen and the British pound was ¥225.0 per £1.0, one unit of Japanese output cost ¥2000, and one unit of British output cost £8.0. What was the real exchange rate between the U.K.

  Explain a cobb-douglas production function

Consider a Cobb-Douglas production function with three inputs. K is capital, L is labor, and H is human capital. The production function is Y= K^1/3 L^1/3 H^1/3 Derive an expression for the marginal product of labor. How does an increase in the am..

  What would have to happen to the nominal wage rate

According to classical macroeconomic theory, monetary policy shocks are "neutral." Explain what this means. Based on that theory, how would a 5% increase in a nation's money supply affect its real wage rate (W/P), all else equal

  How much a woman has in her orp account after retirement

A woman is retiring and has 2,000,000 in her ORP account. How long will she be able to withdraw 100,000 per year beginning 1 year from now if the account earns a rate of 4% per year

  Calculate the velocity of circulation and nominal gdp

If quantity of money is $3 trillion, real GDP is $10 trillion, the price level is ..09, the real interest rate 2 percent a year, and the nominal interest rate is 7 percent a year, calculate the velocity of circulation, the value M times V, and nom..

  Real gdp rose by what percent

Suppose nominal GDP in 2005 was $15 trillion, and in 2006 it was $16 trillion. The general price index in 2005 was 100, and in 2006 it was 103. Between 2005 and 2006, real GDP rose by what percent

  What is the balance at the end of ten years

Suppose you make $500monthly deposits into a tax-deferred retirement plan that pays interest at a rate of 10% per year compound quarterly. Suppose that money deposited during a quarter will not earn any interest. What is the balance at the end of ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd