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dse 2006 51 doubt
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leon
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Jun 13, 2015; 2:56pm
dse 2006 51 doubt
please help with 51st one
Sris
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Jun 13, 2015; 3:32pm
Re: dse 2006 51 doubt
LOOK...
at d world price p^*(before the tariff)
dd wud be p^*=a -qd that implies qd=a-p^*
ss wud be p^*=bqs that implies qs=p^*/b
now after the tariff domestic price rises to p^*+t
dd wud be qd=a-p^* -t(put p^*+t in d dd function)
ss wud be qs= p^*+t/b(put p^*+t in d ss function)
now iif u cud recall the tariff diagram u wud know deadweight loss = sum of two triangles)
=1/2((p^*+t/b) -p^*/b)t +1/2( a-p^*-(a -p^*-t))t
=t^2(1+b)/2b
leon
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Jun 13, 2015; 3:49pm
Re: dse 2006 51 doubt
Thanks
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