Having rejected a tariff on steel (a tax on imports), the Prime Minister of Isoland is now considering the same-sized tax on steel consumption (including both imported and domestically produced steel).

a Using Figure 9.6, identify the quantity consumed and the quantity produced in Isoland under a steel consumption tax.

b Construct a table similar to that in Table 9.3 for the steel consumption tax.

c Which raises more revenue for the government – the consumption tax or the tariff? Which has a smaller deadweight loss? Explain.