The diagram below shows the domestic demand and supply curves for denim jeans in Canada.The prevailing world price is P W.Assume that all jeans are identical.
FIGURE 33-2
-Refer to Figure 33-2.Suppose Canada has free trade in jeans and then imposes a tariff of $ t per pair.Canadaʹs production will then be at the quantity

Question

The diagram below shows the domestic demand and supply curves for denim jeans in Canada.The prevailing world price is P W.Assume that all jeans are identical.
  FIGURE 33-2
-Refer to Figure 33-2.Suppose Canada has free trade in jeans and then imposes a tariff of $ t per pair.Canadaʹs production will then be at the quantity

Quizplus · Accepted Answer

When a tariff is imposed, domestic production increases up to the point where the domestic supply curve intersects the world price plus the tariff line. This is typically represented by a shift from the quantity at the world price to a higher quantity, which in this case is Q2.

The Diagram Below Shows the Domestic Demand and Supply Curves