Final answer:
To find the intercept of the CPC (Consumer Price Index) after trade, you need to analyze the impact of trade barriers on producer and consumer surplus.
Step-by-step explanation:
The intercept of the Consumer Price Index (CPI) after trade can be found by analyzing the impact of trade barriers on producer and consumer surplus. When trade barriers are imposed, the price of goods increases, resulting in a higher producer surplus and a smaller consumer surplus.
To find the intercept of the CPC (Consumer Price Index) after trade, you can follow these steps:
Suppose the barriers to trade are imposed, imports are excluded, and the price rises to PNo Trade.
Observe what happens to the producer surplus and consumer surplus.
Compare the areas of the two triangles to determine the increase in producer surplus.
Examine the consumer surplus, which shrinks to the area of the triangle PNo Trade, E, and B.