-Refer to the Diagram Above,where S and D Are the Domestic

question 12

Multiple Choice

-Refer to the diagram above,where S and D are the domestic supply and demand for a product.The world price of the product is $6.What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed,compared with the total revenue received by foreign producers when a $4 per unit tariff is paid?

• A) There would be no difference.
• B) There would be $80 more revenue with a quota than with a tariff.
• C) There would be $200 more revenue with a quota than with a tariff.
• D) There would be $120 more revenue with a tariff than with a quota.
• E) There would be $220 more revenue with a tariff than with a quota.

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Definitions:

Average Inventory

An accounting measure used to estimate the value of inventory over a certain period by averaging the beginning and ending inventory levels.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Ending Inventory

The final value of goods available for sale at the end of an accounting period.

Net Income

The amount of earnings left over after all expenses, including taxes and costs, have been deducted from total revenue; essentially, the company's profit.