Post-Tariff Producer Revenue Calculation

Steps:

• Determine post-tariff domestic price: rises to world price plus tariff (e.g., $10).
• Find new domestic production quantity: increases along supply curve to 200 units.
• Calculate revenue: multiply new price by new quantity ($10 × 200 =$2000).
• Verify: tariff protects domestic producers, boosting their output and revenue.

Why D is correct:

• Producer revenue = post-tariff price × domestic quantity supplied, per standard tariff model in international trade.

Why the others are wrong:

• A: Underestimates by ignoring full price increase or using pre-tariff quantity.
• B: Matches possible consumer expenditure loss but not producer gain.
• C: Reflects pre-tariff revenue or import value, not post-tariff domestic output.

Final answer: D