Business, 11.12.2019 19:31 CoolxBreeze

The united states currently imports all of its coffee. the annual demand for coffee by u. s.

consumers is given by the demand curve q = 25010p . world producers can harvest and ship

coffee to u. s. distributors at a constant marginal cost of $8 per pound (assume ac = mc).

u. s. distributors can in turn distribute coee for a constant $2 per pound. the u. s. coffee

market is competitive. congress is considering a tariff on coffee imports of $2 per pound.

(a) if there is no tariff, how much do consumers pay for a pound of coffee? what is the

quantity demanded?

(b) if the tariff is imposed, how much will consumers pay for a pound of coffee? what is the

quantity demanded?

(c) calculate the lost consumer surplus.

(d) calculate the tax revenue collected by the government.

(e) does the tariff result in a net gain or a net loss to society as a whole?

Answers: 3

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The united states currently imports all of its coffee. the annual demand for coffee by u. s.