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 34- 2
-Refer to Figure 34- 2. If Canada imposes a tariff of $t per pair of jeans, Canadian jean producers' revenues will increase by the area equal to

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 34- 2
-Refer to Figure 34- 2. If Canada imposes a tariff of $t per pair of jeans, Canadian jean producers' revenues will increase by the area equal to

Quizplus · Accepted Answer

The tariff increases the price of imported jeans, making domestic jeans more competitive. This leads to an increase in the quantity of domestic jeans sold, which in turn increases producer revenue. The area D + E + I represents the increase in producer revenue due to the tariff.

The Diagram Below Shows the Domestic Demand and Supply Curves