The diagram below shows the domestic demand and supply curves for denim jeans in Canada.The prevailing world price is PW.Assume that all jeans are identical.
FIGURE 34- 2
-Refer to Figure 34- 2.Suppose Canada has free trade in jeans and then imposes a tariff of $t per pair.Canada's jean- producing firms will gain producer surplus equal to the area
A) A.
B) A + B + C.
C) A + D.
D) D.
E) D + E + F + G + H.
Correct Answer:
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