The accompanying table gives domestic supply and demand schedules for a product. Suppose that the world price of the product is $1. $\begin{array}{|c|c|c|}
\hline\text { Ouantity }&&\text { Ouantity }\
(\text { Supplied }&&\text { Demanded }\
\hline \text { (Domestic) } & \text { Price } & \text { (Domestic) } \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$ With a $1-per-unit tariff, prices (revenue per unit) received by domestic and foreign producers respectively will be

Question

Quizplus · Accepted Answer

With the $1-per-unit tariff, the domestic price will increase by $1, so at each quantity supplied domestically, the price received domestically will be $1 more than the world price (which is $1). Therefore, the domestic prices (revenues) will be $2, $3, $4, $5, and $6, respectively, for the five quantities supplied domestically. The world price is $1, so foreign producers will continue to receive $1 per unit.

The Accompanying Table Gives Domestic Supply and Demand Schedules for a Product