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The figure below shows the national market for mopeds in a small country. Da and Sa are the domestic demand and supply curves of mopeds,
The figure below shows the national market for mopeds in a small country. Da and Sa are the domestic demand and supply curves of mopeds, respectively. Initially, the country's government has a tariff on imports of mopeds. Price $800 - Domestic price line after tariff $750 World price line O 0.5 0.6 Quantity (Millions of mopeds per year) The figure below shows the marginal external benefit curve (MEL) of the country from the production of domestic mopeds. Marginal External Benefit $140 $125 MEB O 0.6 Quantity (Millions of mopeds per year) What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic
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