Assignment:
Consider the market for shoes in country A. Demand is assumed to be 100p where p is the final consumer price.
Suppose that country A does not produce shoes and that there are two importers B and C.
The export prices for shoes in both countries are pB = 59:99 and pC, respectively. Furthermore suppose that country A is a small country so that its demand does not ináuence export prices.
Suppose that, initially, country A levies a uniform import tariff of t = 10 on each pair of imported shoes.