Part D

Supply = P=4+Q Demand =P=100-2Q P=36 Q = 32

With tariff of $2 on World Trade Price of $10

Production = 12 = 4+Q

Q1= 8

Consumption = 12=100-2Q

Q2 = 44

Import

Q2-Q1 = 44-8 = 36

Government Revenue = 36*2 = $72

PART E

In a separate diagram, illustrate the effect of the import tariff in part d) on the society's net welfare i.e.

illustrate the net welfare change of a move from free trade to trade with tariff (4).