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17) Let PS, PSw and, PSw+t represents the producer surplus under the three scenarios: (1) autarky with price = P, (2) free trade with price
17) Let PS, PSw and, PSw+t represents the producer surplus under the three scenarios: (1) autarky with price = P, (2) free trade with price = Pw , and (3) tariff with price = Pw+t . Assume that tax revenue is not part of the producer surplus. Which of the following is true for this country? A) PS > PSw > PSw+t B) PS < PSw < PSw+t C) PSw < PS < PSw+t D) PSw < PSw+t < PS E) Depends on the actual value of tariff
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