The following image shows the market for wheat for the country of Palatino.S^D is the domestic supply of wheat,and D^D is the domestic demand for wheat.Suppose the world price of wheat is $9 per bushel.Suppose a specific tariff of $6 is imposed on each bushel of wheat imported.The net welfare loss from the tariff is represented by the area _____.

Question

The following image shows the market for wheat for the country of Palatino.S<sup>D</sup> is the domestic supply of wheat,and D<sup>D</sup> is the domestic demand for wheat.Suppose the world price of wheat is $9 per bushel.Suppose a specific tariff of $6 is imposed on each bushel of wheat imported.The net welfare loss from the tariff is represented by the area _____. A) A and C B) I and H C) B and D D) E E) F

Quizplus · Accepted Answer

The net welfare loss from the tariff is represented by the deadweight loss triangle which is formed by the intersection of the demand curve (DS1) and the supply curve (SS1) between the price of the world price ($9) and the price after the imposition of the tariff ($15). This area is represented by the shaded region B and D. Therefore, the correct answer is C, which includes B and D.

The Following Image Shows the Market for Wheat for the Country