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Figure 9-3 A graph of price, P, versus quantity, Q, shows a supply curve, Domestic Supply, rising linearly from point (0, 1) to (600, 7),
Figure 9-3 A graph of price, P, versus quantity, Q, shows a supply curve, Domestic Supply, rising linearly from point (0, 1) to (600, 7), and a demand curve, Domestic Demand, descending linearly from point (0, 7) to (600, 1). The curves intersect at (300, 4). A horizontal line, World Price, extends from P = 2. A horizontal line, World Price + Tariff, extends from P = 3. A vertical line extends from Q = 100 to P = 2. A vertical line extends from Q = 200 to P = 3. A vertical line extends from Q = 400 to P = 3. A vertical line extends from Q = 500 to P = 2. Refer to Figure 9-3. The amount of revenue collected by the government from the tariff is a. $200. b. $600. c. $400. d. $500
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