The market for all-leather men's shoes is served by both domestic (U.S.) and foreign (F) producers. The domestic producers have been complaining that foreign producers are dumping shoes onto the U.S. market. As a result, Congress is very close to enacting a policy that would completely prohibit sales by foreign manufacturers of leather shoes in the U.S. market. The demand curve and relevant supply curves for the leather shoe market are as follows:
Q_D = 50,000 - 500P
Q_US = 6000 + 150P
Q_F = 2000 + 50P,
where Q = thousands of pairs of shoes per year, and P = price per pair.
a. Currently there are no restrictions covering all-leather men's shoes. What are the current equilibrium values?
b. Calculate the price and quantity that would prevail if the proposed policy is enacted.
c. Sketch a diagram that analyzes the economic welfare implications of the proposed policy.

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The Answer of The market for all-leather men's shoes is served by both domestic (U.S.) and foreign (F) producers. The domestic producers have been complaining that foreign producers are dumping shoes onto the U.S. market. As a result, Congress is very close to enacting a policy that would completely prohibit sales by foreign manufacturers of leather shoes in the U.S. market. The demand curve and relevant supply curves for the leather shoe market are as follows: Q_D = 50,000 - 500P Q_US = 6000 + 150P Q_F = 2000 + 50P, where Q = thousands of pairs of shoes per year, and P = price per pair. a. Currently there are no restrictions covering all-leather men's shoes. What are the current equilibrium values? b. Calculate the price and quantity that would prevail if the proposed policy is enacted. c. Sketch a diagram that analyzes the economic welfare implications of the proposed policy.

The Market for All-Leather Men's Shoes Is Served by Both