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Demand and Supply: TV Set (Australia) Price of TV Sets Quantity Demanded Quantity Supplied $ 500 400 300 200 100 0 10 20 30 40 50 40 30 20 10 0.

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Presentation on theme: "Demand and Supply: TV Set (Australia) Price of TV Sets Quantity Demanded Quantity Supplied $ 500 400 300 200 100 0 10 20 30 40 50 40 30 20 10 0."— Presentation transcript:

1 Demand and Supply: TV Set (Australia) Price of TV Sets Quantity Demanded Quantity Supplied $

2 Problem 15.5 Plot demand and supply schedules Equilibrium price and quantity w/o trade Consumer surplus and producer surplus w/o trade Free trade: import $100/set – Australian TV purchases – Australian TV production – Australian TV imports – Australian Consumer surplus – Australian Producer surplus

3 Problem 15.5 (continued) Protection! $100 tariff per TV set – Price of TVs in Australia now – Quantity of TVs bought by Australians – Australian production of TVs – Australian imports – Reduction in consumer surplus – Increase in producer surplus – Tariff revenue – Consumption, protective, redistributive, and revenue effects – Deadweight loss


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