The amount of revenue the government collects after imposing the tariff is ________.

Question

Quizplus · Accepted Answer

With the tariff, the price of sugar becomes $2,000 per ton. At that price, the quantity demanded domestically is 80 tons per year, and the quantity supplied domestically is 40 tons per year, implying that the country imports 40 tons per year. Since the government collects $1,000 on each ton of imported sugar, total revenue from the tariff is $40,000 (= $1,000 × 40).

The Amount of Revenue the Government Collects After Imposing the Tariff