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3 votes
Consumer surplus changes from _______ to _______

with the introduction of the tariff.
producer surplus changes from _______ to _______ with the
introduction of the tariff.

1 Answer

2 votes

Final answer:

Consumer surplus decreases and producer surplus increases with the introduction of a tariff.

Step-by-step explanation:

When a tariff is introduced, the consumer surplus changes from a higher amount to a lower amount. This is because consumers now have to pay a higher price for a lower quantity of goods, reducing their surplus.

On the other hand, the producer surplus changes from a lower amount to a higher amount. Producers are now able to sell more quantity at a higher price, resulting in an increase in their surplus.

User AdrienBrault
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