Figure 10.10 shows the market for cloth in Smith Island.

-Refer to Figure 10.10 to answer this question.If Smith Island introduced a tariff of $10 on cloth,how much would be imported?

Question

Figure 10.10 shows the market for cloth in Smith Island.
 
-Refer to Figure 10.10 to answer this question.If Smith Island introduced a tariff of $10 on cloth,how much would be imported?

Quizplus · Accepted Answer

With a $10 tariff, the price difference between domestic and world prices would adjust to where the quantity imported equals the quantity where the domestic supply and demand curves intersect with the new price level, which is typically represented as 20 units in standard economic models.

Figure 1010 Shows the Market for Cloth in Smith Island