Domestic market for oil is described by the following functions:
The rest of the world price is $40.
What is the equilibrium price and quantity in the domestic market assuming no trade with rest of the world?
What is the equilibrium price and quantity in the domestic market if trade opens?
What happens to imports if an import tariff of $1 per barrel is introduced?

Question

Quizplus · Accepted Answer

The Answer of Domestic market for oil is described by the following functions:
The rest of the world price is $40.
What is the equilibrium price and quantity in the domestic market assuming no trade with rest of the world?
What is the equilibrium price and quantity in the domestic market if trade opens?
What happens to imports if an import tariff of $1 per barrel is introduced?

Domestic Market for Oil Is Described by the Following Functions