The following graph shows the domestic supply of and demand for wheat in New Zea

Question

The following graph shows the domestic supply of and demand for wheat in New Zealand. The world price (Pw) of wheat is $245 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic 1 suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place 470 Domestic Demand 445 420 395 Domestic Supply e 320

Explanation / Answer

1)360-40= 320 brushels

2)295-245= tariff of 50 per brushel will achieve that.

3)160*50=$8000

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