Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 9-5 shows the impact of this tariff.
-Refer to Figure 9-5.Without the tariff in place,the United States produces

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Without the tariff in place, the United States produces 12 million pounds of coffee. This is because the world price of coffee is $1.50 per pound, and the domestic price of coffee is $2.00 per pound. At this price, it is more profitable for the United States to import coffee than to produce it domestically.