Tariff Shifts Import Supply Curve Upward

Steps:

• Original equilibrium at X occurs where domestic demand intersects total supply (domestic plus imports at world price).
• Tariff raises the price of imports, shifting the total supply curve upward by the tariff amount.
• New equilibrium forms at higher price and lower quantity where shifted supply meets demand.
• Point B marks this new intersection.

Why B is correct:

• B is the post-tariff equilibrium per the law of supply, as tariffs increase effective import prices, reducing quantity demanded and supplied.

Why the others are wrong:

• A: Represents pre-tariff point or overestimates tariff effect.
• C: Indicates no change or incorrect shift direction.
• D: Shows excessive quantity reduction, like a quota outcome.

Final answer: B