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Figure 3 A supply and demand graph with a world price and a world price with tariff. Price, P, is plotted against quantity, Q. An
Figure 3 A supply and demand graph with a world price and a world price with tariff. Price, P, is plotted against quantity, Q. An increasing Domestic Supply starts at a vertical intercept (0, 1). A decreasing Domestic Demand with a vertical intercept (0, 11). Supply and Demand intersect at the domestic equilibrium (5, 6). A horizontal line World Price has a vertical intercept (0, 3) and crosses Demand at (2,3) and Supply at (8, 3). Two vertical droplines go from those intercepts to (2, 0) and (8, 0). A horizontal line World Price plus Tariff has a vertical intercept (0, 4.5) and crosses Demand at (3.5, 4.5) and Supply at (6.5, 4.5). Two vertical droplines go from those intercepts to (3.5, 0) and (6.5, 0). There are seven areas labeled A, B, C, D, E, F, and G. Area A is a trapezoid between the vertical axis, Domestic Supply, Domestic Demand, and a horizontal portion of World Price plus Tariff between zero and 3.5. Area B is a rectangle to the right of area A. It is between Domestic Demand, Domestic Demand, and a portion of World Price plus Tariff between 3.5 and 6.5. Area C is a trapezoid
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