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.The deadweight loss caused by the tariff 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.The deadweight loss caused by the tariff is

Quizplus · Accepted Answer

The deadweight loss is the area of the triangle formed by the supply curve, the demand curve, and the tariff line. The base of the triangle is 300 units, and the height is $20. Therefore, the area of the triangle is (1/2) * 300 * 20 = $3,000. The deadweight loss is twice this amount, or $6,000.

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