Suppose that the U.S. imposes a countervailing duty of 10% on coated paper imported from China to offset alleged Chinese subsidies. Suppose further that the U.S. duty-free price of Chinese coated paper imports is $500 per 1,000 meter roll and that the price of an equivalent roll of U.S.made coated paper is $600 per 1,000 meter roll. What is the U.S. government's estimate of the dollar value of the Chinese subsidies?
a. $50 per 1,000 meter roll
b. $60 per 1,000 meter roll
c. $50 to $60 per 1,000 meter roll
d. $100 per 1,000 meter roll
Ans: a. $50 per 1,000 meter roll
Economics
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