The figure below shows the demand (D) and supply (S) curves of a good produced domestically in an economy as well as traded in the international market. Figure 21.1
In the figure,
P1: Price of the good in the international market.
P2: Price of the good in the domestic market after the imposition of tariff by the government.
P3: No-trade price of the good in the domestic market.
According to Figure 21.1, the domestic equilibrium quantity of the good is:
A) Q1.
B) Q5.
C) Q2.
D) Q3.
E) Q4.
Correct Answer:
Verified
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