The consumption effect of a tariff indicates the welfare loss to a country resulting from the domestic consumers shifting from cheaper imports to more expensive local goods.

What is the optimal level of provision of a public good?

What will be an ideal response?

All of the following are true, except

a. Some consumers may infer high prices of a good to signal high quality b. Low prices can also signal high quality c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic