Transcript Minimum price where some of the product is imported

Minimum price where some of the product is imported
EU supply
P
Pw
EU demand
O
QS1
Q d1
Imports
Q
Minimum price where some of the product is imported
EU supply
Import levy
P
Pt
Pw
EU demand
O
QS1
Q d1
Q
Minimum price where some of the product is imported
EU supply
Import levy
P
Pt
Pw
EU demand
O
QS1
Q d2
QS2
Imports
Q d1
Q
Minimum price where some of the product is imported
EU supply
Import levy
P
Pt
Pw
Extra amount paid By
consumers
EU demand
O
QS1
Q d2
QS2
Imports
Q d1
Q
Minimum price where some of the product is imported
EU supply
Import levy
P
Pt
Extra amount paid
to farmers
Pw
AMOUNT PAID
IN IMPORT
LEVIES to Govt
EU demand
O
QS1
Q d2
QS2
Imports
Q d1
Q
But over time effect of subsidies and price floor’s means supply rises – so need
to look
P at Minimum prices for a product where the country is self-sufficient
SEU
Pw
a
b
DEU
O
Qd1
Q S1
Exports
Q
Minimum prices for a product where the country is self-sufficient
P
SEU
Pi
Pw
a
b
DEU
O
Qd1
Q S1
Q
Minimum prices for a product where the country is self-sufficient
P
e
d
SEU
Pi
a
Pw
b
DEU
O
Q d2
Qd1
Q S1
Surplus
QS2
Q
Minimum prices for a product where the country is self-sufficient
P
e
SEU
d
Pi
Pw
a
f
b
c
Amount bought into
intervention
DEU
O
Q d2
Qd1
Q S1
Surplus
QS2
Q
Minimum prices for a product where the country is self-sufficient
P
e
SEU
d
Pi
Pw
f
a
b
c
COST OF BUYING
THE SURPLUS
DEU
O
Q d2
Qd1
Q S1
Surplus
QS2
Q
Minimum prices for a product where the country is self-sufficient
P
e
SEU
d
Pi
Pw
f
a
NET COST
b
c
REVENUE FROM
SALE OF SURPLUS
ON WORLD MARKET
DEU
O
Q d2
Qd1
Q S1
Surplus
QS2
Q