The following are domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.

$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { supplied } \
\text { (domestic) }
\end{array} & \text { Price } & \begin{array} { c }
\text { Quantity } \
\text { demanded } \
\text { (domestic) }
\end{array} \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$
-If a $1 tariff is imposed on this product,the total amount of tariff revenue collected will be:

Question

The following are domestic supply and demand schedules for a product. Suppose that the world price of the product is $1.

$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { supplied } \
\text { (domestic) }
\end{array} & \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { demanded } \
\text { (domestic) }
\end{array} \
\hline 12 & \$ 5 & 2 \
\hline 10 & 4 & 4 \
\hline 7 & 3 & 7 \
\hline 4 & 2 & 11 \
\hline 1 & 1 & 16 \
\hline
\end{array}$
-If a $1 tariff is imposed on this product,the total amount of tariff revenue collected will be:

Quizplus · Accepted Answer

With a $1 tariff on the world price of $1, the new domestic price becomes $2. At a price of $2, the quantity supplied domestically is 4 units, and the quantity demanded domestically is 11 units. Therefore, the country will import 7 units (11 demanded - 4 supplied) to meet its domestic demand. The tariff revenue collected is $1 per unit on these 7 imported units, totaling $7.

The Following Are Domestic Supply and Demand Schedules for a Product