The following diagram shows a country which is a price- taker in world trade for a particular product. It initially has a tariff on the product as shown by the vertical difference between the two world supply curves.
If the tariff were abolished, the net efficiency gain would be areas
A) 2 and 4
B) 3
C) 1 and 3
D) 1, 2, 3 and 4
Correct Answer:
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