Answer: $20
Explanation:
When the Government introduces a tariff, it will have the effect of reducing competition for the local producers because import prices will now be higher.
The Producer surplus before the tariff was G because they were forced to sell at the global price. With the imposition of the tariff, the price went to $4 or rather P2. This then increased Producer Surplus to include area F as well.
The total Producer Surplus is therefore, F + G.
This is a triangle so it will be solved for the area by the formula;
= [tex]\frac{1}{2} * base * height[/tex]
= [tex]\frac{1}{2}[/tex] * 20 * ( 4 -2)
= 10 * 2
= $20
