In: Economics
Consider the case of a Foreign monopoly with no Home production, and assume that at Home the inverse demand equation is given by: ? = −20? + 2,000 and the Foreign monopolist has a constant marginal cost of $500 (MC*=500).
a) Write the equation of the Marginal Revenue (MR)
b) Calculate the quantity and price of equilibrium before the imposition of the tariff
Now assume that the Home country imposes a tariff of $250:
c) Calculate the new price paid by Home consumers
d) Calculate the net-of-tariff price received by the Foreign monopolist
Please show work.