Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit.
-Refer to Figure 9-22.Suppose the government imposes a tariff of $20 per unit.With trade and a tariff,total surplus is
A)$96,000.
B)$114,000.
C)$120,000.
D)$126,000.

Question

Figure 9-22
The following diagram shows the domestic demand and domestic supply in a market.In addition,assume that the world price in this market is $40 per unit. 
-Refer to Figure 9-22.Suppose the government imposes a tariff of $20 per unit.With trade and a tariff,total surplus is
A)$96,000. 
B)$114,000. 
C)$120,000. 
D)$126,000.

Quizplus · Accepted Answer

The total surplus with a tariff is calculated by adding consumer surplus, producer surplus, and government revenue from the tariff. The correct total surplus with the $20 tariff is $114,000.

Figure 9-22 The Following Diagram Shows the Domestic Demand and Domestic Supply