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Answer:
increases the same amount with tariffs and equivalent quotas.
Explanation:
In Economics, a surplus refer to the amount by which the quantity supplied of a good exceeds the quantity demanded of the same good.
A producer surplus is the amount by which a buyer is willing to pay for a particular good minus the cost of producing the same good.
On the other hand, a consumer surplus is the amount by which a buyer is willing to pay for a particular good minus the amount the buyer actually pays for it.
In the case of a small country, a producer surplus increases (raises) the same amount (an amount a buyer is willing to pay for a good minus the cost of producing the good) with tariffs and equivalent quotas.
A tariff can be defined as tax levied by the government of a country on goods and services imported from another country.
Generally, tariffs can reduce both the volume of exports and imports in a country. In order to generate revenues, domestic government make use of tariffs while quotas do not generate any revenue for them.
Answer:
It gives the increment of $5,900.
Explanation:
For computing the increment effect, the following things is need to be considered.
1. Incremental sales of reworking cost = Sales price - rework cost
= $58,100 - $6,600
= $51,500
2. Scrap value = $45,600
As in the give question, the incremental value is computed based on reworking rather than scrap value. So, the scrap value amount is to be deducted from the incremental sales of reworking cost.
The amount is equals to
= $55,100 - $45,600
= $5,900
Thus, it gives the increment of $5,900.
