Imposing a tax on imported widgets

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Reference no: EM131790009

Question: Consider the market for widgets. Widgets are produced in the United States, unless producers aren't willing to meet the quantity demanded at a particular price. In that case, widgets are imported.

Suppose that the price with free trade is $7. If lawmakers want to ensure that U.S. widget producers can sell at least 8,000 widgets, what might they do?

Price	Quantity Demand	Quantity SuppliedDomestically	Quantity Imported
$6	13,000	2,000	8,000
$7	12,000	4,000	8,000
$8	11,000	6,000	5,000
$9	10,000	8,000	2,000
$10	9,000	9,000	0
$11	8,000	10,000	0

- impose a tax on imported widgets

- provide a subsidy for imported widgets

- impose an import quota

Reference no: EM131790009

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