Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. A tariff of Pt?Pc or an import quota of y?w will have the same effect on
A. the volume of imports.
B. the revenues of domestic producers.
C. the domestic price.
D. all of these.
Answer: D
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A) discouraged; increase B) discouraged; decrease C) encouraged; increase D) encouraged; decrease
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An increase in demand will cause
What will be an ideal response?