What is the gain-loss in consumer surplus

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Reference no: EM131530388

Question: The accompanying diagram illustrates the U.S. domestic demand curve and domestic supply curve for beef.

The world price of beef is PW . The United States currently imposes an import tariff on beef, so the price of beef is PT . Congress decides to eliminate the tariff. In terms of the areas marked in the diagram, answer the following questions.

a. With the elimination of the tariff what is the gain/ loss in consumer surplus?

b. With the elimination of the tariff what is the gain/ loss in producer surplus?

c. With the elimination of the tariff what is the gain/ loss to the government?

d. With the elimination of the tariff what is the gain/ loss to the economy as a whole?

Reference no: EM131530388

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