Consider a perfectly competitive market for raincoats in Wetland. Consumers in Wetland have the following demand function for raincoats . Raincoats are supplied by domestic and foreign firms. For simplicity, assume that there is a single representative

Consider a perfectly competitive market for raincoats in Wetland. Consumers in Wetland have the following demand function for raincoats $D(p)=60-p$. Raincoats are supplied by domestic and foreign firms. For simplicity, assume that there is a single representative domestic firm and a single representative foreign firm that are price takers. Both firms have the same cost functions $C(q)=q^{2} / 4$. No other firms can enter the industry. (a) Find equilibrium price. (b) Suppose that government decided to introduce a $\$ 6$ per unit tariff on foreign raincoats. Find the equilibrium quantities produced by domestic and foreign firms. (c) Suppose that government is looking for the tariff rate $t^{*}$ that maximizes the revenue from this tariff. Find the required $t^{*}$