What is the equilibrium price and quantity sold

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U.S. consumers have a demand function for umbrella which has the form QD = 90-p. Umbrellas are supplied by U.S. firms and U.K. firms. For simplicity, we assume there is a single representative firm in each country that behaves competitively. The cost function for producing umbrella in each country is ????(????) =y^2/2.

(a) What is the aggregate supply function for umbrella? What is the equilibrium price and quantity sold?

(b) The domestic industry lobbies for protection and Congress agrees to input a $3 tariff on foreign umbrellas. What is the new U.S. price for umbrella paid by the consumers?

(c) How many umbrellas will foreign firms supply? How many umbrellas will domestic firms supply?

Reference no: EM131395811

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