Increasing a tariff will ________ the domestic quantity consumed of the good, while ________ the domestic production of the good.

Question

Quizplus · Accepted Answer

Increasing a tariff on an imported good makes the good more expensive for domestic consumers, which typically leads to a decrease in the quantity consumed domestically. At the same time, the higher price of the imported good can make domestically produced goods more competitive, leading to an increase in domestic production.

Increasing a Tariff Will ________ the Domestic Quantity Consumed of the Good