Multiple Choice
The figure given below shows the market for shoes in the U.S. The domestic price line with tariff lies above the international price line. Dd and Sd are the domestic demand and supply curves of shoes respectively. Following the imposition of tariff, the domestic producer surplus _____ by the area _____.
A) increases; a
B) decreases; a
C) increases; (a + b)
D) decreases; (a + b)
Correct Answer:

Verified
Correct Answer:
Verified
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