The following graph depicts the market for a particular good in Dorne.Dorne was importing the good under free trade and then decided to impose a tariff.Use the graph to answer the following questions:

-What is the value of the tariff?

Question

The following graph depicts the market for a particular good in Dorne.Dorne was importing the good under free trade and then decided to impose a tariff.Use the graph to answer the following questions:
 
-What is the value of the tariff?

Quizplus · Accepted Answer

Before the tariff, the equilibrium price was $20 and the equilibrium quantity was 50 units. After the tariff, the new supply curve is S2, which is $2 higher than the original supply curve because of the $2 per unit tariff. The new equilibrium price is $22 and the equilibrium quantity has decreased to 40 units.

To find the value of the tariff, we can compare the price difference between the old equilibrium price and the new equilibrium price. The price increased by $2, which is a 10% increase from the old price of $20. Therefore, the tariff is $2, which is choice C.

There is no "best choice(s)" provided in the question, so we cannot provide an answer for that part.

The Following Graph Depicts the Market for a Particular Good