The diagram below shows supply and demand curves for bicycles in the domestic Canadian market. Assume that all bicycles are identical.
FIGURE 34- 4
-Refer to Figure 34- 4. Suppose there is free trade in bicycles and the world price is $200. If Canada then imposes a 50- percent import tariff on bicycles, domestic consumption will
A) increase by 30 000.
B) increase by 20 000.
C) decrease by 10 000.
D) increase by 10 000.
E) decrease by 20 000.
Correct Answer:
Verified
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