Figure 9-3
-Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers
A)gain $200 of producer surplus.
B)gain $150 of producer surplus.
C)gain $50 of producer surplus.
D)gain $100 of producer surplus.

Question

Figure 9-3 
-Refer to Figure 9-3. When a tariff is imposed in the market, domestic producers
A)gain $200 of producer surplus. 
B)gain $150 of producer surplus. 
C)gain $50 of producer surplus. 
D)gain $100 of producer surplus.

Quizplus · Accepted Answer

When a tariff is imposed, domestic producers benefit because the tariff effectively increases the market price of the imported goods, making domestic goods more competitive. This leads to an increase in the quantity sold by domestic producers and an increase in their producer surplus. Without seeing Figure 9-3, the specific numbers cannot be verified, but based on the options provided, if B is the correct answer, it means that the imposition of the tariff leads to a $150 gain in producer surplus for domestic producers. This gain represents the area between the pre-tariff and post-tariff supply curve up to the quantity produced domestically after the tariff is imposed.

Figure 9-3 -Refer to Figure 9-3. When a Tariff Is Imposed in Is