Need explanation economics Reading 20
EFFECTS OF TARIFFS AND QUOTA
“From the viewpoint of the domestic country, the loss in consumer surplus is only partially offset by the gains in domestic producer surplus and the collection of tariff revenue. If none of the quota rents are captured by the domestic govt, the overall welfare loss to,the domestic economy is greater by the amount of the quota rents. It is the entire difference between the gain in producer surplus and the loss of consumer surplus.”
Would really appreciate if someone could explain wrt the the diagram given in Kaplan notes, which portion reflects the loss in consumer surplus and also which portion represents the welfare loss to domestic economy in case of quota rent not being captured by the govt. |
发表于 2013-5-7 17:15
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