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Import car market in equilibrium before restricts it

While the import car market is in equilibrium before the government restricts car imports to Q1, the price which buyers will pay for an import as: (1) falls from P0 to P1. (2) is stable, although dealer profits fall by Q0 to Q1. (3) rises from P0 to P2. (4) shows a subsidy wedge of P2 to P1.

1750_Trade Barriers.png

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