Exhibit 19-5
-If the country illustrated in Exhibit 19-5 is initially trading without restrictions at a world price of $1.00, the gain in producer surplus as a result of a tariff of $0.50 per unit is represented by area

Question

Exhibit 19-5 
-If the country illustrated in Exhibit 19-5 is initially trading without restrictions at a world price of $1.00, the gain in producer surplus as a result of a tariff of $0.50 per unit is represented by area

Quizplus · Accepted Answer

The gain in producer surplus due to a tariff is represented by the area that shows the increase in price received by domestic producers, which is area c.

Exhibit 19-5 -If the Country Illustrated in Exhibit 19-5 Is Initially Trading