Graph the domestic producer surplus increase

Problem

The United States wheat market is shown in Figure 17P-3.

a. How many bushels of wheat should be allowed under an import quota in order to increase the domestic price from $4 to $5 per bushel?

b. Graph the domestic producer surplus increase as a result of this quota?

c. Graph the deadweight loss that results from this quota.

2301_Figure 17P-3.jpg

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