Refer to Figure 35.5.S₁ represents the U.S.domestic supply of a good and S₂ represents supply in the United States under conditions of free trade.If the United States imposes a tariff on this good,what will happen to the quantity imported? A)Imports will increase because producers will pass the cost of the tariff on to consumers. B)Imports will decline as price increases and domestic production decreases. C)Imports will decline as price increases and domestic production increases. D)Imports will increase as price increases and domestic production increases.

Question

Quizplus · Accepted Answer

A tariff increases the price of imported goods, leading to a decrease in imports and an increase in domestic production as domestic producers can now compete more effectively with the higher-priced imports.