Suppose the European Commission is considering legislation that decreases tariff

Question

Suppose the European Commission is considering legislation that decreases tariffs on agricultural products imported from the US. The benefit of the tariff reduction is estimated at 5 euros per person Argibo is a hypothetical special interest group in the EU that represents the four largest agricultural companies in the EU. Agribo opposes this legislation and argues agricultural firms in the EU stand to lose $500 million euros if tariff reduction goes through. If the population of the EU is 500 million what is the estimated benefit to the population? Number million euros

Explanation / Answer

Total profit in case of tariff reduction = 5* 500 = 2500 million

Net estimated profit to the population = 2500-500 = 2000 million

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