Answer
a) Please see the graph.
b) Consumer surplus increases by 110 million dollars. Producer surplus decreases by 30 million dollars. Total surplus increases by 80 million dollars.
c) 60 million dollars would be the government revenue. 20 million dollars would be the deadweight loss. The tariff wouldn't be a good policy for U.S. welfare. Domestic television producers would possibly support the policy to protect domestic jobs.
d) The analysis would be minimally affected since the affected market is the U.S. (and the question asks about Japanese government subsidies).
Work Step by Step
a) Consumer surplus increases from $A+B$ to $A+B+C+D+E+F$. Producer surplus decreases from $C+G$ to $G$. Total surplus increases from $A+B+C+G$ to $A+B+C+D+E+F+G$.
b)
The change in consumer surplus is $C+D+E+F$. The change in producer surplus is $-C$. The change in total surplus is $D+E+F$.
Consumer surplus change:
$(P_{W}-(P_{W}-100))*1000000+(P_{W}-(P_{W}-100))*(1200000-1000000)*1/2$
$(P_{W}-P_{W}+100)*1000000+(P_{W}-P_{W}+100)*(200000)*1/2$
$100*1000000+100*200000*1/2$
$100*1000000+100*100000$
$100,000,000+10,000,000$
$110,000,000$
Producer surplus change:
$(P_{W}-(P_{W}-100))*200000+1/2*(400000-200000)*(P_{W}-(P_{W}-100))$
$(P_{W}-P_{W}+100)*200000+1/2*200000*(P_{W}-P_{W}+100)$
$100*200000+100000*100$
$20,000,000+10,000,000$
$30,000,000$
c)
$(1,000,000-400,000)*(100)$
$600000*100$
$60,000,000$
Total surplus - tax revenue = deadweight loss
$80,000,000 - 60,000,000 = 20,000,000$
d)
