The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 11 10 9 8 1654321 A O B World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q с Domestic supply Di EF Refer to the above figure. The tariff O decreases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O decreases producer surplus by the area C + D and decreases consumer surplus by the area D+E+F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D+E+F
The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 11 10 9 8 1654321 A O B World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q с Domestic supply Di EF Refer to the above figure. The tariff O decreases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O decreases producer surplus by the area C + D and decreases consumer surplus by the area D+E+F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D+E+F
Chapter7: Market Efficiency And Welfare
Section: Chapter Questions
Problem 11P
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