Question: Please help me figure out the right steps. 4. Effects of a tariff on international trade The following graph shows the domestic demand for and
Please help me figure out the right steps.


4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Guatemala. The world price (Pw) of oranges is $545 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. (?) 905 Domestic Demand Domestic Supply 825 78 745 705 PRICE (Dollars perton) 685 82 585 PW 545 505 10 20 30 40 0 80 70 80 90 100 QUANTITY (Tons of oranges) If Guatemala is open to international trade in oranges without any restrictions, it will import tons of oranges. Suppose the Guatemalan government wants to reduce imports to exactly 40 tons of oranges to help domestic producers. A tariff of $ per ton will achieve this.A tariff set at this level would raise S in revenue for the Guatemalan government
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