What should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?

Question

Quizplus · Accepted Answer

A tariff on imports increases the price of the imported goods, making them less attractive to consumers. This causes a decrease in demand for the imported goods, leading to a decrease in equilibrium quantity. At the same time, the domestic producers of similar goods can increase their prices to match the higher price of the imported goods, leading to an increase in equilibrium price. Therefore, the correct option is B, where equilibrium price should go up, and equilibrium quantity should go down.

What Should Happen to the Equilibrium Price and Quantity in a Market