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A small nation permits free trade in good X. At the good’s free-trade price of $8,...

A small nation permits free trade in good X. At the good’s free-trade price of $8, domestic firms supply 6 million units and imports account for 4.2 million units. Recently, the small country has erected trade barriers with the result that imports have fallen to zero, price has risen to $10, and domestic supply has increased to 8 million units. Calculate the change in consumer surplus and producer surplus resulting from the trade barrier. What is the deadweight loss?

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Rahul Sunny answered 1 year ago
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