Question 4. The demand for DVDs in the Australian mar
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Question 4. The demand for DVDs in the Australian market in thousands is given by Qd, =750 Ã¢ï¿½ï¿½ 30P and t
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Question 4. The demand for DVDs in the Australian market in thousands is given by Qd, =750 Ã¢ï¿½ï¿½ 30P and the domestic supply in thousands by Qs = 300 + 15P. (a) What is the equilibrium price and quantity of DVDs assuming there is no foreign competition? A foreign producer is able to produce and sell DVDs for $5 and commences to export to Australia. (b) What is the equilibrium price and quantity of DVDs as a result of these imports? (c) How many DVDs are supplied by Australian producers and how many are imported? To protect Australian producers the government imposes a tariff of $2 on each DVD imported into Australia. (d) What effect does this have on domestic consumption and production of DVDs? (e) How much does the government collect in import duty? What is the deadweight loss that arises from the imposition of this tariff?
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