World price Quantities Prices World price plus tariff Domestic demand Tariff Marginal cost ABDC Quantity imported T HE BASIC WELFARE ANALYSIS OF TARIFFS.

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Presentation transcript:

World price Quantities Prices World price plus tariff Domestic demand Tariff Marginal cost ABDC Quantity imported T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 1a: competition on the home market & tariff

World price Quantities Prices Domestic price Domestic demand Quota Marginal cost A BD C Residual (after-quota) demand T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 1b: competition at home + quota

World price Quantities Prices Domestic demand Tariff Marginal cost B D Marginal revenue Quantity imported T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 2a: monopoly at home + closed economy

World price Quantities Prices Domestic demand Tariff Marginal cost Marginal revenue Quantity imported T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 2b: monopoly at home + free trade

World price Quantities Prices World price plus tariff Domestic demand Tariff Marginal cost ABC Marginal revenue Quantity imported T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 2c: monopoly at home + tariff D

B World price Quantities Prices Domestic price Domestic demand Quota Marginal cost A C D Residual (after-quota) domestic demand T HE BASIC WELFARE ANALYSIS OF TARIFFS AND QR S Case 3: monopoly at home + quota

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