am. 155. Suppose an import tariff raises the price of a good from its free trade level of $250 per unit to $270 per unit. Because of this priceincrease, the quantity of domestic consumer demand for the good falls from 100,000 units to 75,000 units. This indicates thatconsumer surplusA Increases by $1.75 millionB Decreases by $5.5 millionC Decreases by $1.75 millionD Decreases by $2 million

Consumer surplus refers back to the financial gain or application that clients derive from buying an…

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consumer surplus

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

am. 155.

Suppose an import tariff raises the price of a good from its free trade level of $250 per unit to $270 per unit. Because of this price
increase, the quantity of domestic consumer demand for the good falls from 100,000 units to 75,000 units. This indicates that
consumer surplus
A Increases by $1.75 million
B Decreases by $5.5 million
C Decreases by $1.75 million
D Decreases by $2 million

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