Question: The figure below shows the annual domestic demand and supply for 2GB compact flash cards for digital cameras.
a. Assume the worldwide price of these 2GB cards is $10. What percent of United States sales would be imported?
b. Assume the U.S. government puts a $5 tariff per card on imports. How many 2GB flash cards will be imported into the United States?
c. Given the tariff in question b, how much revenue will the government collect from this tariff?
d. Given the tariff in question b, how much more sales revenue will domestic companies enjoy as a result of the tariff?
