Explore BrainMass

Quotas vs tariff dilemma

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Which measure causes the least damage economically and why?

Import quotas vs. Tariffs

© BrainMass Inc. brainmass.com October 25, 2018, 9:17 am ad1c9bdddf

Solution Preview

Step 1

Import tariffs cause the least damage economically. Importers under a quota system are placed in a monopoly like situation and can gain high profits. When compared with tariffs, under quotas the same restriction produces higher price rise in the home country. There is a theory of tariff-quota equivalence which assumes perfect competition. The theory says that if perfect competition prevails in the market a tariff and import quota are equivalent in the sense that ...

Solution Summary

This solution explains quotas vs.tariffs. The sources used are also included in the solution.

See Also This Related BrainMass Solution

Economics, Markets, Supply, Demand, & Cartel Pricing

Please brief the following:

The short-run market supply curve:
-Elasticity of market supply
-producer surplus in the short run

The analysis of competitive markets:
-Evaluating the gains and losses form government policies-consumer and producer surplus
-The efficiency of a competitive market
-minimum prices
-price supports and production quotas
-Import quotas and tariffs
-The impact of a tax or subsidy

Market power: Monopoly and Monopsony
-Average revenue and marginal revenue
-The Monopolist's output decision
-An Example
-A rule of thumb for pricing
-Shifts in demand
-The effect of a tax
-The Multiplant firm

Monopoly Power:
-Measuring Monopoly power
-The rule of thumb for pricing

Sources of Monopoly Power:
-The Elasticity of Market Demand
-The number of Firms
-The Interaction Among Firms

The social costs of Monopoly power:
-Rent seeking
-price regulation
-natural Monopoly
-regulation in practice

Monopolistic Competition:
-The makings of monopolistic competition
-Equilibrium in the short run and the long run
-Monopolistic competition and economic efficiency

-Equilibrium in an Oligopolistic market
-The Cournot model
-The linear demand curve
-First Mover Advantage-stackelberg model

Competition versus Collusion: The prisoners dilemma

Implications of the prisoners dilemma for Oligopolistic pricing:
-Price Rigidity
-Price Signaling and Price Leadership
-The Dominant Firm Model

Analysis of Cartel Pricing.

View Full Posting Details