Consider the market for widgets. Widgets are produced in the United States, unless producers aren’t willing to meet the quantity demanded at a particular price. In that case, widgets are imported. Suppose that the price with free trade is $7. If lawmakers want to ensure that U. S. widget producers can sell at least 8,000 widgets, what might they do?

Price

Quantity Demand

Quantity SuppliedDomestically

Quantity Imported

$613,0002,0008,000
$712,0004,0008,000
$811,0006,0005,000
$910,0008,0002,000
$109,0009,0000
$118,00010,0000
impose a tax on imported widgets

provide a subsidy for imported widgets

impose an import quota

impose a tax on imported widgets - if the government imposes a tax on imported widgets, imported widgets will become more expensive to consumeres, making consumers flock to domestically produced widgets, prompting domestic firms to increase domestic supply to at least 8,000 widgets.

impose an import quota - the government can also simply impose an import quota of 4,000 widgets, which will oblige consumers to buy at least 8,000 domestic widgets if they want to satisfy their demand of 12,000 widgets.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30

answerproduct line length; product mix width;