2. Recently, China placed tariffs on the importation of US soybeans. Assume that the domestic market...

2. Recently, China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations:

Demand: P = 115 – 1/15Q Supply: P = 55 + 1/15Q

Where P is Yuan per bushel of soybeans and Q is 10 million bushels per year.

The world price for soybeans is ¥65/bushel. Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including the Domestic Demand curve, Domestic Supply curve, the World Price, and the Price with tariffs.

Expert Solution

Rahul Sunny answered 2 years ago

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