Figure 9-4 -Refer to Figure 9-4.Suppose the U.S.government Imposes a $0.25 Per

question 58

Essay

Figure 9-4

-Refer to Figure 9-4.Suppose the U.S.government imposes a $0.25 per pound tariff on rice imports.Figure 9-4 shows the demand and supply curves for rice and the impact of this tariff.Use the figure to answer questions a-i.
a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased?
b.Calculate the value of consumer surplus with the tariff in place.
c.What is the quantity supplied by domestic rice growers with the tariff in place?
d.Calculate the value of producer surplus received by U.S.rice growers with the tariff in place.
e.What is the quantity of rice imported with the tariff in place?
f.What is the amount of tariff revenue collected by the government?
g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff.
h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government?
i.Calculate the deadweight loss due to the tariff.

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Definitions:

Monopolist's Profits

The excess earnings a monopolist achieves by being the sole provider of a product or service, which allows for pricing above marginal cost.

Price Discrimination

A strategy by a provider to sell the same or almost the same goods or services at various prices in different markets.

Efficiency

The optimal allocation of resources in a way that maximizes productivity or utility.

Price Discrimination

Price discrimination involves a seller charging different prices for the same product or service to different customers, based on factors like demand, customer attributes, or purchase volume.