Exhibit 19-3

-In Exhibit 19-3,with a tariff of $0.50 per unit and a world price of $1.00,

Question

Exhibit 19-3
 
-In Exhibit 19-3,with a tariff of $0.50 per unit and a world price of $1.00,

Quizplus · Accepted Answer

The exhibit shows that the domestic price is $1.5 per unit (world price of $1.0 + tariff of $0.50). At this price, domestic consumers will demand 75 units (point A on the exhibit) and domestic producers will supply 25 units (point B on the exhibit). The difference between demand and supply (50 units) will be imported at the world price of $1.0, resulting in a total of 75-25=50 units being imported.

Exhibit 19-3 -In Exhibit 19-3,with a Tariff of $0.50 Per Unit and $0.50