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 P_cP_t per unit tariff, per unit revenue received by domestic and foreign producers respectively will be:

Question

Quizplus · Accepted Answer

With the tariff, the world price plus the tariff becomes the domestic price. Therefore, domestic producers will receive P_t per unit, while foreign producers will receive P_c per unit.

Refer to the Above Diagram, Where Sd and Dd Are

Refer to the Above Diagram, Where S_d and D_d Are