Scenario: The following figure shows the demand curve, D, and the supply curve, S, of chairs in Barylia. Barylia is open to free trade. The world price of chairs is $3, and the government of Barylia decides to impose a $1 tariff on the import of chairs.

-Refer to the scenario above.Calculate the total surplus after the government imposes a tariff of $1 per unit.

Question

Scenario: The following figure shows the demand curve, D, and the supply curve, S, of chairs in Barylia. Barylia is open to free trade. The world price of chairs is $3, and the government of Barylia decides to impose a $1 tariff on the import of chairs.
 
-Refer to the scenario above.Calculate the total surplus after the government imposes a tariff of $1 per unit.

Quizplus · Accepted Answer

The total surplus after a tariff is the sum of consumer surplus, producer surplus, and government revenue. The correct calculation based on the scenario provided results in a total surplus of $240.

Scenario: the Following Figure Shows the Demand Curve, D, and the Supply