Multiple choice question on tariff graph (1 Viewer)

[magik22]

I just don't get these graphs on tariffs. How do you read them. For example this question.

http://img504.imageshack.us/my.php?image=tariffgraphtu2.jpg


Can someone explain this question and answer in depth.

Thx heaps.

 

[lolcal]

upload it to imageshack.us

 

[magik22]

bump

 

[reynoldson]

A), the government receives $100 in revenue, which is calculated as ABCD the area of the box under the equilibrium, so you go i think it was 50-30 (20) x the increase in price (5) = $100, and at that higher price, the domestic producers are willing to increase production, follow it up the supply curve.