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Suppose That the Domestic Demand for Bottled Water Can Be

Question 86

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Suppose that the domestic demand for bottled water can be expressed as Q = 200 - 4P and the domestic supply can be expressed as Q = 16P. If the world price of bottled water is $5, would domestic bottled water producers prefer a $3 per unit tariff on imported bottled water or an import quota of 40 units?

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With an import quota, the new domestic p...

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