How does the imposition of a tariff reduce the price of imports?
a. At the lower quantity supplied, the price to the importer is lower than if there were free trade.
b. At the lower quantity demanded, the price to the importer is lower than if there were free trade.
c. Supply of the product is increased from domestic production, reducing the price of the imports.
d. Demand for the product is decreased, so that price must fall.
a
You might also like to view...
Refer to Figure 2-14. What is the opportunity cost of producing 1 popsicle in Iceland?
A) 1 1/2 snow cones B) 3/4 of a snow cone C) 2/3 of a snow cone D) 270 snow cones
Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over time?
A) The firms' economic profits will be reduced. B) New firms will enter. C) Demand for the existing firms' output will become more inelastic. D) The number of substitutes available in the industry will increase.