Refer to the figure below to answer the following questions.

The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 7.3.1
-Refer to Figure 7.3.1,the deadweight loss from the tariff is ________.
A)$80 million
B)$16 million
C)zero
D)$64 million
E)$32 million

Question

Refer to the figure below to answer the following questions.
  
The figure shows the market for shirts in Canada, where D is the domestic demand curve and S is the domestic supply curve.The world price is $20 per shirt.Canada imposes a tariff on imported shirts of $4 per shirt.
Figure 7.3.1
-Refer to Figure 7.3.1,the deadweight loss from the tariff is ________.
A)$80 million 
B)$16 million 
C)zero 
D)$64 million 
E)$32 million

Quizplus · Accepted Answer

The deadweight loss from a tariff is typically represented by the loss in consumer and producer surplus that is not offset by gains elsewhere. In this context, the correct answer is $32 million, which is the sum of the two triangles representing the deadweight loss in the supply and demand curves after the tariff is imposed.

Refer to the Figure Below to Answer the Following Questions