Quiz Space

Managerial Economics · End Term · 10 May 2026 · January 2026 term · Set 1

Question 24: Tariff results in

Question 24

+1.5 marksOne correct option

India currently imports all of its palm oil. The annual demand for palm oil by Indian consumers is given by the demand curve Q=2000-4P, where Q is quantity of palm oil in thousand litres and P is market price in INR per litre. World producers can harvest and ship palm oil to Indian distributors at a constant marginal cost (=average cost) of INR 50 and Indian distributors can distribute it at a cost of INR 10 per litre. Consider market for palm oil to be competitive.
Indian government is considering a tariff on palm oil import of INR 10 per litre.
Based on the above data, answer the given subquestions.

Tariff results in

  1. A

    Net gain for the society

  2. B

    Net loss for the society

  3. C

    Neither loss nor gain

  4. D

    Cannot compute

Show answer

Correct answer

  • B

    Net loss for the society

Video solution

The video solution to this question is being recorded and will play here. Until then, the answer key is above.

See the whole paperTake it as a mock test

Question 24 of 37 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 10 May 2026, in the January 2026 term (Managerial Economics 06 May 26). It carries 1.5 marks.

More questions from this paper

  1. Q1Calculate the output of paper if it is produced under competitive conditions and no attempt is made to monitor or regul…
  2. Q2Calculate the Price of paper if it is produced under competitive conditions and no attempt is made to monitor or regula…
  3. Q3Determine the socially efficient price of paper. P =
  4. Q4Determine the socially efficient quantity of paper. Q =
  5. Q5Based on the above data, answer the given subquestions.
  6. Q6Based on the above data, answer the given subquestions.
  7. Q7Based on the above data, answer the given subquestions.
  8. Q8Based on the above data, answer the given subquestions.
  9. Q9Based on the above data, answer the given subquestions.
  10. Q10Based on the above data, answer the given subquestions.
  11. Q11Based on the above data, answer the given subquestions.
  12. Q12Based on the above data, answer the given subquestions.
  13. Q13Based on the above data, answer the given subquestions.
  14. Q14Based on the above data, answer the given subquestions.
  15. Q15Expected value of first product is (in \$)\ NOTE: Enter the exact answer without any extra space in the beginning or at…
  16. Q16Inscript Expected value of second product is (in \$)\ NOTE: Enter the exact answer without any extra space in the begin…
  17. Q17Choose the correct alternative(s)
  18. Q18A risk-loving decision maker has the utility function U(I) = 25I2 where I denotes the payoff of the product.\ Choose th…
  19. Q19If there is no tariff, what is the quantity demanded (in thousand litres) _
  20. Q20If the tariff is imposed, how much a consumer will pay for a litre of palm oil _
  21. Q21What is the new quantity demanded now (in thousand litres)? _
  22. Q22What will be the lost consumer surplus due to the imposed tariff (in thousand INR)
  23. Q23Tax revenue for the government will be (in thousand INR)
  24. Q25What is the monopolist’s profit-maximizing price and quantity? P= _
  25. Q26What is the monopolist’s profit-maximizing price and quantity? Q=
  26. Q27The resulting profit to the monopolist will be π =
  27. Q28What is firm’s degree of monopoly power using the Lerner index _
  28. Q29The accounting cost associated with Mohan’s restaurant business is
  29. Q30The economic cost associated with Mohan’s restaurant business is
  30. Q31If the insurance provider offered medical insurance at a price of \$2000
  31. Q32If the insurance company offered medical insurance at a price of \$2400
  32. Q33What is the cost minimizing quantity of labour and capital respectively for producing 9000 units of output? L =
  33. Q34What is the cost minimizing quantity of labour and capital respectively for producing 9000 units of output? K = _
  34. Q35What is the minimum cost of producing 9000 units of output in INR?
  35. Q36Find the optimal bundle of goods 1 and 2 for this consumer. The optimal bundle will consist of X1= _
  36. Q37Find the optimal bundle of goods 1 and 2 for this consumer. The optimal bundle will consist of X2=