4. Effects of a tariff on international trade
The following graph shows the domestic demand for and supply of lemons in Burundi. The world price ($P_W$) of lemons is $270 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 lemons and that there are no transportation or transaction costs associated with international trade in
lemons. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.