The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.?Figure 20.1??In the figure,?P₁: Price of the good in the international market.?P₂: Price of the good in the domestic market after the imposition of tariff by the government.?P₃: No-trade price of the good in the domestic market.

-According to Figure 20.1, the tariff revenue earned by the domestic government is equal to the:

Question

The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market.?Figure 20.1??In the figure,?P₁: Price of the good in the international market.?P₂: Price of the good in the domestic market after the imposition of tariff by the government.?P₃: No-trade price of the good in the domestic market.
 
-According to Figure 20.1, the tariff revenue earned by the domestic government is equal to the:

Quizplus · Accepted Answer

The tariff revenue is represented by the area between the domestic price with the tariff and the world price, over the quantity of imports. This corresponds to area BEFH.

The Figure Below Shows the Demand (D) and Supply (S)