The diagram below shows the demand and supply curves for refrigerators in Canada.
FIGURE 33-1
-Refer to Figure 33-1.Suppose P0 is the world price and Canada imports refrigerators.Suppose the Canadian government then responds to political pressure from domestic refrigerator manufacturers and imposes a tariff high enough that all imports are eliminated.As a result of this tariff,the price and quantity of refrigerators in Canada will be,respectively,

Question

The diagram below shows the demand and supply curves for refrigerators in Canada.
  FIGURE 33-1
-Refer to Figure 33-1.Suppose P0 is the world price and Canada imports refrigerators.Suppose the Canadian government then responds to political pressure from domestic refrigerator manufacturers and imposes a tariff high enough that all imports are eliminated.As a result of this tariff,the price and quantity of refrigerators in Canada will be,respectively,

Quizplus · Accepted Answer

When a tariff is imposed that is high enough to eliminate all imports, the domestic market adjusts to the new equilibrium where the domestic supply meets domestic demand without any imports. This results in an increase in the price to P2 and the quantity adjusts to where the domestic supply curve intersects the domestic demand curve at Q3.

The Diagram Below Shows the Demand and Supply Curves for Refrigerators