4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of maize in Kenya. The world price (Pw) of maize is $265 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 490 -Domestic Demand Domestic Supply 465 440 415 390 365 -- 34o PRICE (Dollars per ton) 315 290 265 + I 240 'l I l l | l l l l I i QUANTITY (Tons of maize) If Kenya is open to international trade in maize without any restrictions, it will import: tons of maize. Suppose the Kenyan government wants to reduce imports to exactly 20 tons of maize to help domestic producers. A tariff of C] per ton will achieve this. A tariff set at this level would raise in revenue for the Kenyan government