The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt.
-In the figure above, the tariff the domestic production of shirts in the United States by
Per year.

Question

Quizplus · Accepted Answer

A tariff typically increases domestic production by making imported goods more expensive, thus encouraging local production. The figure suggests an increase of 8 million shirts in domestic production.

The Figure Shows the Market for Shirts in the United