If a country removes a tariff on imported shoes,we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____.

Question

Quizplus · Accepted Answer

Removing a tariff on imported shoes increases the supply of shoes in the domestic market, which leads to a fall in domestic prices of shoes. With lower prices, consumers will increase their demand for shoes, leading to a rise in the quantity of shoes consumed in the domestic market. Therefore, the correct option is B - fall in price and rise in quantity consumed.

If a Country Removes a Tariff on Imported Shoes,we Expect