Exhibit 19.2

-Refer to Exhibit 19.2,which shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit,and a specific tariff of $0.50 per unit is imposed on each unit of the imported good.In such a case,the gain in producer surplus as a result of a tariff of $0.50 per unit is represented by the area _____

Question

Exhibit 19.2
 
-Refer to Exhibit 19.2,which shows U.S.demand for and domestic supply of a good.Suppose the world price of the good is $1.00 per unit,and a specific tariff of $0.50 per unit is imposed on each unit of the imported good.In such a case,the gain in producer surplus as a result of a tariff of $0.50 per unit is represented by the area _____

Quizplus · Accepted Answer

The gain in producer surplus due to the tariff is represented by area c, which is the increase in domestic producer surplus as domestic producers can sell more at the higher price resulting from the tariff.

Exhibit 19.2 -Refer to Exhibit 19.2,which Shows U.S.demand for and Domestic Supply