Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.With a per unit tariff in the amount P_cP_t, price and total quantity sold will be:

Question

Quizplus · Accepted Answer

With a per unit tariff, the domestic price will increase by the amount of the tariff, from P_c to P_t. This will cause the quantity demanded to decrease from z to y, and the quantity supplied to increase from x to y. Therefore, the total quantity sold will be y, and the price will be P_t.

Refer to the Above Diagram, Where Sd and Dd Are

Refer to the Above Diagram, Where S_d and D_d Are