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(a)Suppose:â€¢US demand for steel is given by P = 200 â€“ Q;â€¢US supply for steel is given by P = 50 + Q/2; â€¢International firms can supply as much or as little steel as they want at a price of P = 80.Using a supply and demand diagram, illustrate whether: U.S. consumers and /or U.S. producers, benefit if international producers are prevented from selling into the U.S.
(b)Referencing the class on political economy, what explains why the government might enact a policy like steel tariffs?
(c)Big steel firms were initially against the steel tariffs, despite the fact that they would seem to benefit from higher domestic steel prices. Later, they change their stance to favor steel tariffs. later favored steel tariffs. What might explain why they werenâ€™t in favor of steel tariffs throughout the period?