The figure above shows the market for shirts in Australia, where D is the Australian demand curve and S is the Australian supply curve. The world price is $20 per shirt. Australia imposes a tariff on imported shirts of $4 per shirt.
-In the figure above, Australian consumers' _______ from the tariff is _______.

Question

Quizplus · Accepted Answer

Australian consumers experience a loss due to the tariff, and the amount of this loss is represented by the combined areas of the consumer surplus before and after the tariff imposition. The correct calculation leads to a loss of $176 million.

The Figure Above Shows the Market for Shirts in Australia