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Scenario 9-2
Suppose Domestic Demand and Domestic Supply in a Market

Question 135

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Scenario 9-2
Suppose domestic demand and domestic supply in a market are given by the following equations: QD=20−PQS=P\begin{array} { l } Q ^ { D } = 20 - P \\Q ^ { S } = P\end{array} ​
-Refer to Scenario 9-2. Suppose the world price in this market is $8 per unit, and suppose the country imposes a $1 per unit tariff. If the country allows trade with a tariff, how much are consumer surplus, producer surplus, tariff revenue, and total surplus?

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