(Solved): The following graph shows the domestic supply of and demand for wheat in New Zealand. The worid pri ...

The following graph shows the domestic supply of and demand for wheat in New Zealand. The worid price \( (P \) w \( ) \) of wheat is \( \$ 265 \) per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. If New Zealand is open to international trade in wheat without any restrictions, it will import bushels of wheat. Suppose the New zealand government wants to reduce imports to exactly 80 bushels of wheat to heip domestic producers. A tariff of bushel will achleye this. A tariff set at this level would raise in revenue for the New Zealand government.