In the diagram, ${D_d}$ and Sd represent the domestic demand and supply curves for a product. ${S_w}$ represents world supply of the product when there is free trade, at a world price of ${P_w}$. The initial domestic market equilibrium level of consumption of the product is at E.
If a tariff of t were to be imposed, world supply would now be represented by ${S_w} + tarif$, at a price of ${P_w} + t$.
What would be the level of domestic production and the total of government revenue from tariffs after the tariff of t were imposed?
A
2 )
B
3 )
C
4 )
D
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