$$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity Demanded } \
\text { Domestically }
\end{array} & \text { Price } & \begin{array} { c }
\text { Quantity Supplied } \
\text { Domestically }
\end{array} \
\hline 1,400 & \$ 10 & 2,200 \
\hline 1,600 & 9 & 2,000 \
\hline 1,800 & 8 & 1,800 \
\hline 2,000 & 7 & 1,600 \
\hline 2,200 & 6 & 1,400 \
\hline 2,400 & 5 & 1,200 \
\hline
\end{array}$$ Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total
Revenue (after tariff) going to domestic producers would be

Question

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity Demanded } \
\text { Domestically }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity Supplied } \
\text { Domestically }
\end{array} \
\hline 1,400 & \$ 10 & 2,200 \
\hline 1,600 & 9 & 2,000 \
\hline 1,800 & 8 & 1,800 \
\hline 2,000 & 7 & 1,600 \
\hline 2,200 & 6 & 1,400 \
\hline 2,400 & 5 & 1,200 \
\hline
\end{array}$$ Refer to the accompanying table for a certain product's market in Econland. If the world price of the product were $6 and a tariff of $1 per unit were applied to imports of the product, then the total
Revenue (after tariff) going to domestic producers would be

Quizplus · Accepted Answer

To determine the effect of the tariff, we need to first find the quantity of imports at the world price of $6. At a price of $6, the domestic quantity supplied will be 1,400 (from the table), while the domestic quantity demanded will be 2,200 - 1,400 = 800. This means that without the tariff, the country would import 800 units.

With the $1 tariff, the price of imported units will increase to $7 ($6 + $1). We can now calculate the new quantity demanded domestically at this price, which is 1,600 units (from the table). This means that the country will still import 200 units (1,800 - 1,600).

The total revenue (after tariff) going to domestic producers can be calculated by multiplying the tariff-inclusive price of $7 by the domestic quantity supplied of 1,400, and adding the tariff revenue of $1 per unit on the 200 units imported, giving a total of:

$7 x 1,400 + $1 x 200 = $11,200

The total revenue going to foreign producers can be calculated by multiplying the world price of $6 by the 200 units imported, giving a total of:

$6 x 200 = $1,200

Therefore, the total revenue (after tariff) going to foreign producers would be $2,400 (since 2,000 units would now have to be sold domestically, and the revenue from these sales is already included in the domestic revenue calculation).

So the correct answer is B.

Refer to the Accompanying Table for a Certain Product's Market