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.If Canada initially has no tariff on jeans but then imposes a tariff of $t per pair,Canadaʹs imports will
A) increase from (Q4 - Q2) to (Q5 - Q1) .
B) increase from (Q4 - Q2) to (Q5 - Q3) .
C) decrease from (Q5 - Q1) to (Q4 - Q2) .
D) decrease from (Q5 - Q3) to (Q4 - Q2) .
E) decrease from(Q5 - Q3) to (Q3 - Q1) .
Correct Answer:
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