Given the following information, calculate the cost to consumer, the benefit to producers, the change in government revenue, and the deadweight loss of a proposed 15% tariff on cars.
Price of cars (free trade): $40,000
Domestic Production (free trade): 200
Domestic Production (after tariff): 260
Domestic Consumption (free trade): 400
Domestic Consumption (after tariff): 360
The question belongs to Economics and it is about calculating cost to customer, benefits to producers, change in government revenue and deadweight loss. This is about the tariff on cars which have been produced and consumed domestically.
Total Word Count 138Download Full Solution
If you are here for the first time, you can request for a discount coupon, which can knock off upto 20% of the quoted price on any service.