Exhibit 34-11
Refer to Exhibit 34-11. A tariff raises the price in the market from P_W to P_{W + T}. As a result, U.S. domestic sales rise from __________.

Question

Exhibit 34-11 Refer to Exhibit 34-11. A tariff raises the price in the market from P_W to P_{W + T}. As a result, U.S. domestic sales rise from __________.

Quizplus · Accepted Answer

With the imposition of tariff, the domestic price in the US market increases from P_W to P_{W + T}. This makes imports more expensive and domestic producers can now sell their products at a higher price. As a result, domestic sales in the US market will increase from Q₁ to Q₃. So, the correct answer is C.

Exhibit 34-11 Refer to Exhibit 34-11. a Tariff Raises the Price in the Price