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Government intervention

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Question 10

The diagram below shows the impact of a tariff imposed on imports of a good, which increases the domestic price from P1 P_1\,P1​ to P2P_2P2​.

Tariff Diagram

Which area(s) represent(s) the net welfare loss to the domestic economy from imposing this tariff?

WWW

W+YW + YW+Y

X+ZX + ZX+Z

X+Y+ZX + Y + ZX+Y+Z

Government intervention Questions

  1. A Level
  2. /Economics
  3. /Government intervention