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Suppose there is an import quota on sugar. The inverse demand for sugar is P=100-2QD. The...

Suppose there is an import quota on sugar. The inverse demand for sugar is P=100-2QD. The inverse supply for sugar is P=20+2QS. The world price (Pw)= 30 usd/lb. There is a quota set at 20 million/lbs of sugar. P is in Usd/lb.

A) What is the purpose of this policy?

B) Create a graph to demonstrate the impact of the sugar import quota. Include labels and units on both axis.

C) Explain the consequences of this policy, and who supports this policy politically

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Expert Solution

Rahul Sunny answered 1 year ago
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