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The domestic market for calculators is perfectly competitive and is in equilibrium. Domestic demand is given by Qd= 120- 2p and domestic supply is given

The domestic market for calculators is perfectly competitive and is in equilibrium.

Domestic demand is given by Qd= 120- 2p and domestic supply is given by Qs= 3P.

The world price for calculators is $10.

Now, a tariff of $10 is imposed on all imported calculators.

What is the deadweight (DWL) loss of the tariff?

a. $0

b. $0 < DWL < $100

c. $100 < DWL < $200

d. $200 < DWL < $400

e. $400 < DWL

Which is the correct answer and why?

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