Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If government imposes a tariff in the amount of $2 per unit, it will collect revenue in the amount of:
A) $0.
B) $2,400.
C) $5,000.
D) $10,000.

Question

Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If government imposes a tariff in the amount of $2 per unit, it will collect revenue in the amount of:
A) $0. 
B) $2,400. 
C) $5,000. 
D) $10,000.

Quizplus · Accepted Answer

The Answer of Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If government imposes a tariff in the amount of $2 per unit, it will collect revenue in the amount of:
A) $0. 
B) $2,400. 
C) $5,000. 
D) $10,000.

Refer to the Graph Shown for a Small Country That