Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.As a result of the tariff,domestic producers increase their quantity supplied by

Question

Figure 7-2  Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.As a result of the tariff,domestic producers increase their quantity supplied by

Quizplus · Accepted Answer

The tariff increases the price of imported coffee, making domestic coffee relatively cheaper. This results in an increase in the quantity supplied by domestic producers by 9 million pounds of coffee, as shown in the diagram where the domestic supply curve shifts to the right by this amount.