Tariff above Equilibrium Price Exercise Question
Hi, I was wondering if a tariff increases the price of an imported good above the equilibrium price what would I diagram of this look? Would it also imply the quantity of this imported good to be 0? How could I fix the diagram I have attached below.
Some background: The diagram illustrates the Chinese tariff on Australian wine. It is a 210% tariff and increases the price to be higher than the average price of wine in China.