Exhibit 18-4
-In Exhibit 18-4, with a tariff of $0.50 per unit and a world price of $1.00,

Question

Exhibit 18-4 
-In Exhibit 18-4, with a tariff of $0.50 per unit and a world price of $1.00,

Quizplus · Accepted Answer

With a tariff of $0.50 and a world price of $1.00, the domestic price would be $1.50 ($1.00 + $0.50 tariff). At this price, domestic producers would be willing to supply 50 units (point A on the graph) and domestic consumers would only be willing to buy 25 units (point B on the graph). This means that 25 units would need to be imported to meet demand. Therefore, choice B is correct.

Exhibit 18-4 -In Exhibit 18-4, with a Tariff of $0.50 Per Unit