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Scenario 1 Assume India is a small country. India’s demand and supply curves for licorice are: D = 400 – 10P S = 50 + 5P India imports licorice at the price of $10 per bag. 15) Refer to Scenario 1. Determine the free trade quantity demanded and supplied. Then calculate and graph the following effects of an import quota that limits imports to 75 bags of licorice. a. Calculate the consumption and production effects from the import quota.
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