(Figure: The Market for Grapes in California) Use Figure: The Market for Grapes in California. When the government imposes a tariff on imported grapes, the price of grapes in California rises from PW to PT, and the domestic producer surplus _____ to _____.

Question

Quizplus · Accepted Answer

When the government imposes a tariff on imported grapes, the price of grapes in California rises from PW to PT, and the domestic producer surplus increases from G to G+C. Thus, choice D is correct. The other choices are incorrect as producer surplus falls in choices A and B, and rises by more than just C in choice C.

(Figure: the Market for Grapes in California) Use Figure: the Market