contestada

If Zambia is open to international trade in oranges without any restrictions, it will import 180 tons of oranges. Suppose the Zambian government wants to reduce imports to exactly 100 tons of oranges to help domestic producers. A tariff of $ per ton will achieve this. A tariff set at this level would raise $ in revenue for the Zambian government.

Respuesta :

Answer:.Please refer to the explanation section

Explanation:

The question in incomplete we are not given the price of oranges, Tariff rate or Tariff amount imposed on the price of oranges. We will make some assumptions to clearly illustrate how to approach and solved questions of this nature. I have attached a diagram to provide to provide a visual aid to what we will be discussing and calculating.

The Attached diagrams depicts a Demand curve denoted by (D) and a Supply Curve denote by (S)Suppose. The Equilibrium price is $50 and the Equilibrium Quantity is 180 barrels of oranges.  Zambian citizens Import a Barrel of oranges at a Price of $50 per barrel.

Suppose The government imposes a Tariff rate of 40% on the price of each barrel. The Price of will increase to $70 per Barrel that is ($50 x 140%). When the price Increases to $70, there will be a decrease in the quantity demand. The quantity demanded will decrease to 100 barrels of oranges  (please refer to the attached diagram).

Government revenue = 100 Barrels x $20 = $2000.The Government will generate a revenue of $2000 while the quantity demanded will decrease to 100 Barrels.

Ver imagen supabrains
Ver imagen supabrains