--%>

Problem on perfect replacements

Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii) American car prices would increase to P2. (iii) Foreign car exporters would ship much luxury cars to the United States. (iv) American made car sales would increase by Q2 to Q0.

1763_4.jpg

Can someone help me in getting through this problem.

   Related Questions in Macroeconomics

  • Q : Market imperfection associated with

    Question: This assignment in Economics, deals with macro-economics. An essay on Market imperfection associated with negative externalities. According to Economics, perfect markets would require an "invisible hand" to allocate all the resources to be a

  • Q : Microeconomic and macroeconomic effects

    Predictions which restricting international trade to protect specific industries and “infant” firms would (a) inefficiently decrease aggregate output and employment, (b) raise the market power of the protected firms and their workers, and

  • Q : Physical quality of life index DISCUSS

    DISCUSS the experience of high GNP countries and low GNP with regard to PQLI.

  • Q : What points out revenue deficit What

    What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei

  • Q : Which things are concerned with

    Macroeconomics is mainly concerned along with all things as the: (i) decisions individuals and firms make while prices change. (ii) resource usage and technology bases of firms. (iii) levels of national employment and income. (iv) movements within the

  • Q : Problem on rational consumption

    Whenever you dine at an “all-you-can-eat” buffet, the rational consumption prototype is to carry on eating till: (1) The restaurant goes bankrupt. (2) You have eaten as much food as it would encompass cost had you made your own meal at hom

  • Q : Role of price in market economies What

    What is the role of price in market economies?

  • Q : Market experiencing a rise in demand

    When equilibrium moves from point a to point b in the figure shown below, the only market experiencing a rise in demand is illustrated in: (1) Panel A. (2) Panel B. (3) Panel C. (4) Panel D.

    Q : Potential GDP The hypothetical

    The hypothetical information in the following table shows what the economic situation will be in 2015 if the Fed does not use monetary policy: Year Potential GDP Real GDP Price Level 2014 $15.2 trillion $15.2 trillion 110.0 2015 $15.6 trillion $15.8 trillion

  • Q : IS-KM Model with classical supply

    discuss with the help of IS-LM model why money has no effect on output in classical supply case