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THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 1a: competition on the home market & tariff
Prices
Domestic demand
Marginal cost
World price plus tariff
Tariff
A
B
C
D
World price
Quantities
Quantity imported
THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 1b: competition at home + quota
Prices
Domestic demand
Residual (after-quota) demand
Marginal cost
Domestic price
A
B
C
D
World price
Quantities
Quota
THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 2a: monopoly at home + closed economy
Prices
Domestic demand
Marginal revenue
Marginal cost
D
Tariff
B
World price
Quantities
Quantity imported
THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 2b: monopoly at home + free trade
Prices
Domestic demand
Marginal revenue
Marginal cost
Tariff
World price
Quantities
Quantity imported
THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 2c: monopoly at home + tariff
Prices
Domestic demand
Marginal revenue
Marginal cost
World price plus tariff
Tariff
A
B
C
D
World price
Quantities
Quantity imported
THE BASIC WELFARE ANALYSIS OF TARIFFS AND QRS
Case 3: monopoly at home + quota
Prices
Domestic demand
Residual (after-quota) domestic demand
Marginal cost
Domestic price
C
A
D
World price
Quantities
Quota
B
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