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Question: suppose we have the following demand and supply functions taken...

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Suppose we have the following demand and supply functions (taken from Ass HOME Demand P 100- 2Q Suppl PhQ FOREIGN Demand P 2002Q Supply P Q3: Two-country model with import and export tariffs: use the functions above. Suppose the exporter imposes an export tax of $2 per unit and the importer imposes an import tax of $2 per unit b) d) (3 points) Calculate the new equilibrium world price and domestic prices. (7 points) Does the importer gain from the tariff war? Does the exporter? Show and explain fully.

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