00:01
So let's go over this question.
00:06
We have the price of the cars and quantity of cars.
00:32
And then we have domestic supply and domestic demand.
00:47
The world price is given by 8 ,000.
00:52
So that's the price after opening up for trade.
00:56
And then there's a tariff imposed of 2 ,000 per car.
01:00
So add 2 ,000 to 8 ,000 to get the world price plus the tariff.
01:07
And then draw two straight lines to represent this.
01:13
What are the effects on domestic quantities demanded and supplied? so then initially we're looking at where world price and supply and demand curves have crossed.
01:26
So we're going to look on the horizontal axis.
01:52
Our quantity demanded at the world price ends up being 20 ,000.
02:10
Then our quantity supplied at the world price ends up being 14 ,000.
02:26
Then what happens when there's a tariff? so the demand with the tariff ends up being 80 ,500 cars per year.
02:53
Then our supply with the tariff ends up being 15 ,000 cars per year...
