Figure 19-1
Figure 19-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 19-1.Under autarky,the deadweight loss is

Question

Figure 19-1
  Figure 19-1 shows the U.S. demand and supply for leather footwear.
-Refer to Figure 19-1.Under autarky,the deadweight loss is

Quizplus · Accepted Answer

Under autarky, the equilibrium quantity of leather footwear is 80 pairs at a price of $20 per pair. However, at the world price of $10 per pair, the quantity demanded by U.S. consumers expands to 140 pairs, while U.S. producers decrease their supply to 20 pairs. This results in a deadweight loss of triangle EBC, which is equivalent to $30. Therefore, the correct answer is (C) $30.

Figure 19-1 Figure 19-1 Shows the U.S. Demand and Supply