The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
FIGURE 34- 2
-Refer to Figure 34- 2. Suppose that Canada imposes a tariff of $t per pair of jeans. Canada's consumption will then be at the quantity:

Question

The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
  FIGURE 34- 2
-Refer to Figure 34- 2. Suppose that Canada imposes a tariff of $t per pair of jeans. Canada's consumption will then be at the quantity:

Quizplus · Accepted Answer

Before the tariff, the domestic quantity supplied is QS1U1B0 and the domestic quantity demanded is QD1U1B0. With the imposition of the tariff, the domestic price will increase to PSA, which is equal to PS1 + t. This will cause the domestic quantity supplied to increase to QS1U1B15 and the domestic quantity demanded to decrease to QD1U1B14, resulting in a domestic surplus of QS1U1B15S1U1B14. The new consumption level will be at the intersection of the domestic demand curve and the PSA price line, which is QS1U1B14S1U1B0S1U1B1.

The Diagram Below Shows the Domestic Demand and Supply Curves