Question: Please provide answer with explanation because I don't only want the answer but also learn how to do it 19. An island economy imports milk.

Please provide answer with explanation because I don't only want the

Please provide answer with explanation because I don't only want the answer but also learn how to do it

answer but also learn how to do it 19. An island economy

19. An island economy imports milk. Demand is D = 24 - 2p, Supply is S = 2p and the world price is equal to 1 dollar per litre. Next month the governor will implement a tariff of 1 per litre on milk imports. Provide a labelled Supply and Demand Diagram to illustrate and quantify the impact of this tariff. a. The efficiency loss will be equal to . Revenues collected from the tariff will be equal to . Illustrate the efficiency loss and revenues in your diagram. b. The governor gets greedy. He has asked for your help in recalculating the tariff rate. His goal is to maximize the revenues that his government will collect from the tariff. The revenue maximizing tariff rate is dollars per litre. Revenues collected from the tariff will be equal to You do not need to draw this part in your diagram

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