The market for USB flash drives in Country C is perfectly competitive and is in equilibrium.

Domestic demand is given by Q^d = 300 - 4P and domestic supply is given by Q^s = 2P.

The world price for flash drives is $20.

The government of country Cimposes a tariff of $20 on all imported flash drives.

Before the tariff was imposed, country C imported M_Free flash drives.

After the tariff is imposed, country C now imports M_Trf flash drives.

The imposition of the tariff causes a change in Producers' Surplus (PS). What is the dollar value of this change?

Question 3 options:

1)

Producers' Surplus increases by $1200

2)

Producers' Surplus increases by $1600

3)

Producers' Surplus increases by $800

4)

Producers' Surplus decreases by $800

5)

Producers' Surplus decreases by $1200