Tariff Reduces Domestic Consumption Steps:

• Identify free trade equilibrium: Domestic consumption at Q3 where world price intersects demand.
• Tariff raises price to Pw + t, shifting effective supply up.
• Higher price reduces quantity demanded to Q2 on domestic demand curve.
• Consumption falls from Q3 to Q2 due to price increase.

Why B is correct:

• Tariffs increase domestic price, decreasing quantity demanded per the law of demand.

Why the others are wrong:

• A: Q2 to Q1 confuses consumption drop with production rise (Q1 is free trade output).
• C: Q1 to Q3 reverses direction; Q1 is low production, Q3 high consumption.
• D: Q4 to Q3 misapplies; Q4 likely total supply, not consumption change.

Final answer: B