Tariff Reduces Imported Quantity in Supply-Demand Model

Steps:

• Identify pre-tariff world price at point P, where imports equal domestic demand minus supply (MX).
• Tariff raises effective price to point N, shifting supply curve up by tariff amount.
• At new price N, domestic quantity demanded falls to point Qd (e.g., NP), and supplied rises to Qs (e.g., NM).
• Post-tariff imports equal new Qd minus new Qs, which is segment NP.

Why C is correct:

• In tariff diagrams, imports after tariff are the horizontal distance between new supply and demand curves at the tariff-inclusive price, defined as NP per standard international trade models.

Why the others are wrong:

• A. MN: Represents increased domestic production, not imports.
• B. MX: Pre-tariff import quantity, unchanged by tariff.
• D. PX: Original world price level, irrelevant to post-tariff quantity.

Final answer: C