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 consumption 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 consumption will then be at the quantity

Quizplus · Accepted Answer

A tariff increases the price of imported goods, reducing the quantity consumed domestically. Therefore, consumption will decrease from the free trade level to a lower level, which is Q4.

The Diagram Below Shows the Domestic Demand and Supply Curves