The demand for jeans in a country is given by D = 100 - 0.6P,where P is the price of a pair of jeans.Supply by domestic producers is given by S = 20 + 0.4P.The world price of a pair of jeans equals $30 and this economy is open to trade.If a tariff of $10 per pair is placed on jeans imports,the quantity of jeans demanded domestically will change from ___________ pairs with no tariff to _________ pairs with the tariff.

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Quizplus · Accepted Answer

Without the tariff, the price is $30, so demand is D = 100 - 0.6(30) = 82 pairs. With a $10 tariff, the price becomes $40, so demand is D = 100 - 0.6(40) = 76 pairs.

The Demand for Jeans in a Country Is Given by D