Tariff on imported inputs of mobile phone and calculation of NRP.
Utilize the scenarios described below to answer this problem.
Scenario 1: The free trade world price of a mobile phone is $50. All of the inputs used in making the mobile phone are imported. These imported inputs cost $19. A tariff of $6 is placed on mobile phones.
Scenario 2: Use all of the information in Scenario 1 AND now there is a tariff of $10 on imported inputs used to make mobile phones.
find out the NRP for scenario 2.