Figure 9-2
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit.
-Refer to Figure 9-2.Suppose the government imposes a tariff of $20 per unit.With trade and a tariff,total surplus is

Question

Figure 9-2
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-2.Suppose the government imposes a tariff of $20 per unit.With trade and a tariff,total surplus is

Quizplus · Accepted Answer

A tariff reduces total surplus by creating deadweight loss, but the remaining surplus is still higher than without trade. The correct total surplus with the tariff is $114,000.

Figure 9-2 The Following Diagram Shows the Domestic Demand and Domestic Supply