Multiple Choice
The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. Figure 17-11
Refer to Figure 17-11. The tariff
A) decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
B) decreases producer surplus by the area C + D and decreases consumer surplus by the area D + E + F.
C) increases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F.
D) increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F.
Correct Answer:
Verified
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