Figure 9-25
The following diagram shows the domestic demand and supply in a market.Assume that the world price in this market is $10 per unit.
-Refer to Figure 9-25.Suppose the government imposes a tariff of $5 per unit.With trade and a tariff,total surplus is

Question

Figure 9-25
The following diagram shows the domestic demand and supply in a market.Assume that the world price in this market is $10 per unit. 
-Refer to Figure 9-25.Suppose the government imposes a tariff of $5 per unit.With trade and a tariff,total surplus is

Quizplus · Accepted Answer

With the tariff, the domestic price increases to $15 per unit (world price of $10 + tariff of $5). As a result, the quantity demanded decreases from 80 to 40 units, while the quantity supplied increases from 20 to 60 units. 
Consumer surplus is now area A ($300), producer surplus is area C ($600), and government revenue is area D ($1,000). 
Thus, total surplus is $300 + $600 + $1,000 = $1,900.

Figure 9-25 the Following Diagram Shows the Domestic Demand and Supply in Supply