What is the total quantity of gadgets sold when a $1 tariff is applied and the world price is $1?

To determine the total quantity of gadgets sold when a $1 tariff is applied and the world price is $1, it's important to consider the effects of the tariff on both domestic and imported quantities of gadgets.

When the world price is $1, and a $1 tariff is imposed, the effective price of imported gadgets becomes $2 for consumers. This typically reduces the quantity of gadgets demanded since consumers are likely to buy fewer gadgets due to the higher price.

In response to this increased price, domestic producers may be incentivized to increase their production because they can sell at a higher price than they would have without the tariff. This change in price often results in an increase in the quantity supplied by domestic producers.

The quantity sold thus would be a combination of the quantity supplied by domestic producers and the quantity demanded in response to the new price levels. The total quantity sold at the new market equilibrium, which includes both domestic production and any remaining imports (after accounting for the reduced demand due to the tariff), would add up to the figure provided in the correct answer.

All these factors, considering consumer behavior in light of a price increase and adjustments in domestic production, lead to the conclusion that the total quantity of gadgets sold when a $1 tariff is applied