If a country has very high tariffs,
A)companies either do not serve the local market or set up manufacturing plants within the country to save on duties.
B)companies do not serve the local market.
C)companies set up manufacturing plants within the country to save on duties.
D)companies will not serve the local market or set up manufacturing plants within the country to save on duties.

Question

Quizplus · Accepted Answer

High tariffs can lead to companies either avoiding the market altogether or establishing local manufacturing to circumvent the high import costs, thus A is correct as it encompasses both potential responses.

If a Country Has Very High Tariffs