If there are no trade restrictions the world price of $9.00 will prevail in the U.S. From the table,weee that at $00 domestic supply will be 6million pounds ,domesti demand will be provideth difference between domestic demand and domestic supply:22.6=16 million pounds. c.If the United States imposes a tariff of $3 per pound,what will be the U.S.price and level ofimports?How much revenue will the government earn from the tariff?How large is the deadweight loss? With a0 tarifl,the U.S.price will be $12 (the world price plus the tarif).At this prio demand is 16 million pounds and supply ismilli n pounds,import are 8 million pounds (16-8). The government will collect $3*8=$24 million.The deadweight loss is equal to 0.5(12-9)(8-6+0.5(12-9(22.16=s12 million. d.If the United States has no tariff but imposes an import quota of 8 million pounds,what will be the U.S.domestie price?What is the cost of this quota for U.S.consumers of the fiber?What is the gain for U.S. producers? With an import pounds the domestic price will be $12.At$2 the difference between domestic demand and domestic supply is 8 million pounds, i.e.16 million pounds minus 8 million pounds.Note you can also find the equilibrium price by setting demand equal to supply plus the quota so that The cost of the quota to consumers is equal to area A+B+C+D in Figure 9.6.d. which is (12.916)+(0.512.922.160)=$57 million. The gain todomestic toareaA in Figure 9.6.d,which is (12-96)+(0.5)8.612-9=$21milh5on If there are no trade restrictions, the world price of $9.00 will prevail in the U.S. From the table, we see that at $9.00 domestic supply will be 6 million pounds. Similarly, domestic demand will be 22 million pounds. Imports will provide the difference between domestic demand and domestic supply: 22 - 6 = 16 million pounds. c. If the United States imposes a tariff of $3 per pound, what will be the U.S. price and level of imports? How much revenue will the government earn from the tariff? How large is the deadweight loss? With a $3.00 tariff, the U.S. price will be $12 (the world price plus the tariff). At this price, demand is 16 million pounds and supply is 8 million pounds, so imports are 8 million pounds (16-8). The government will collect $3*8=$24 million. The deadweight loss is equal to 0.5(12-9)(8-6)+0.5(12-9)(22-16)=$12 million. d. If the United States has no tariff but imposes an import quota of 8 million pounds, what will be the U.S. domestic price? What is the cost of this quota for U.S. consumers of the fiber? What is the gain for U.S. producers? With an import quota of 8 million pounds, the domestic price will be $12. At $12, the difference between domestic demand and domestic supply is 8 million pounds, i.e., 16 million pounds minus 8 million pounds. Note you can also find the equilibrium price by setting demand equal to supply plus the quota so that The cost of the quota to consumers is equal to area A+B+C+D in Figure 9.6.d, which is (12 - 9)(16) + (0.5)(12 - 9)(22 - 16) = $57 million. The gain to domestic producers is equal to area A in Figure 9.6.d, which is (12 - 9)(6) + (0.5)(8 - 6)(12 - 9) = $21 million