Question

refer to the diagram, where sd and dd are the domestic supply and demand for a product and pc is the world price of that product. with a pcpt per-unit tariff, the quantities sold by foreign and domestic producers, respectively, will be

Answer 1

As given by the diagram, Sd and Dd are domestic supply and demand curves. Therefore, option d is correct

Pe is the world price of that product with PePt is the import tariff, quantities sold by foreign and domestic producers are wy and w.

Because import tariff reduces the quantity of imports and increases domestic producers.

All other options are wrong

Because domestic production increases.

Optio a is correct.According to the given diagram, where Sd and Dd are domestic supply and domestic demand curve.

PePt is the tariff rate, tariff revenue = PePt ×wy

Tariff revenue = price × quantity imported

All other options are wrong.

Because import tariff will reduce consumer surplus

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