Suppose the following domestic demand and supply schedule for Mexico's toothpaste industry: $\begin{array} { c c c }
\hline \begin{array} { c }
\text { Price } \
\text { (peso) }
\end{array} & \begin{array} { c }
\text { Quantity } \
\text { Demanded } \
\text { (in millions) }
\end{array} & \begin{array} { c }
\text { Quantity } \
\text { Supplied } \
\text { (in millions) }
\end{array} \
\hline 0.75 & 39.0 & 36.0 \
0.80 & 38.5 & 36.5 \
0.85 & 38.0 & 37.0 \
0.90 & 37.5 & 37.5 \
0.95 & 37.0 & 38.0 \
1.00 & 36.5 & 38.5 \
1.05 & 36.0 & 39.0 \
\hline
\end{array}$ a) In the absence of free trade, what is the equilibrium price and quantity traded domestically for Mexico's toothpaste industry?
b) Suppose the international price for a toothpaste is 1 peso. Will Mexico export or import toothpaste? How many units?
Now suppose the international price is 0.75 peso.
c) If the Mexican government limits the number of imported toothpaste to 1 million units. How many units will Mexico import and what will be the equilibrium price?
d) If the Mexican government places a 0.10 peso tariff on toothpaste. How many units will Thailand import?

Question

Suppose the following domestic demand and supply schedule for Mexico's toothpaste industry: $\begin{array} { c c c } 
\hline \begin{array} { c } 
\text { Price } \
\text { (peso) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { (in millions) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied } \
\text { (in millions) }
\end{array} \
\hline 0.75 & 39.0 & 36.0 \
0.80 & 38.5 & 36.5 \
0.85 & 38.0 & 37.0 \
0.90 & 37.5 & 37.5 \
0.95 & 37.0 & 38.0 \
1.00 & 36.5 & 38.5 \
1.05 & 36.0 & 39.0 \
\hline
\end{array}$ a) In the absence of free trade, what is the equilibrium price and quantity traded domestically for Mexico's toothpaste industry?
b) Suppose the international price for a toothpaste is 1 peso. Will Mexico export or import toothpaste? How many units?
Now suppose the international price is 0.75 peso.
c) If the Mexican government limits the number of imported toothpaste to 1 million units. How many units will Mexico import and what will be the equilibrium price?
d) If the Mexican government places a 0.10 peso tariff on toothpaste. How many units will Thailand import?

Quizplus · Accepted Answer

The Answer of Suppose the following domestic demand and supply schedule for Mexico's toothpaste industry: $\begin{array} { c c c } 
\hline \begin{array} { c } 
\text { Price } \
\text { (peso) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { (in millions) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied } \
\text { (in millions) }
\end{array} \
\hline 0.75 & 39.0 & 36.0 \
0.80 & 38.5 & 36.5 \
0.85 & 38.0 & 37.0 \
0.90 & 37.5 & 37.5 \
0.95 & 37.0 & 38.0 \
1.00 & 36.5 & 38.5 \
1.05 & 36.0 & 39.0 \
\hline
\end{array}$ a) In the absence of free trade, what is the equilibrium price and quantity traded domestically for Mexico's toothpaste industry?
b) Suppose the international price for a toothpaste is 1 peso. Will Mexico export or import toothpaste? How many units?
Now suppose the international price is 0.75 peso.
c) If the Mexican government limits the number of imported toothpaste to 1 million units. How many units will Mexico import and what will be the equilibrium price?
d) If the Mexican government places a 0.10 peso tariff on toothpaste. How many units will Thailand import?

Suppose the Following Domestic Demand and Supply Schedule for Mexico's