The Diagram Below Shows the Demand and Supply Curves for Refrigerators

question 99

Multiple Choice

The diagram below shows the demand and supply curves for refrigerators in Canada.
FIGURE 34- 1
-Refer to Figure 34- 1. Suppose that P₀ is the world price. If Canada imposes a tariff causing the price of refrigerators in Canada to rise from P₀ to P₁, the consequence would be that

• A)domestic production will increase from Q1 to Q₃ and domestic consumption will fall from Q₅ to Q₃.
• B)domestic production will exceed domestic consumption.
• C)domestic production will increase from Q₁ to Q₂ and domestic consumption will fall from Q₅ to Q₄.
• D)both domestic production and domestic consumption would increase by equal amounts.
• E)both domestic production and domestic consumption would decrease by equal amounts.

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Definitions:

Liabilities

Obligations owed by an individual or entity to others, which can include financial debts, accounts payable, or other fiscal responsibilities.

Liquidated Assets

Assets that have been converted into cash or cash equivalents by selling them on the open market.

Right of Contribution

A legal principle allowing individuals who have paid more than their share of a common debt to seek reimbursement from others who are equally liable.

Winding Up

The process of liquidating a company's assets and disbursing the proceeds to claimants, leading to the dissolution of the company.