If Australia imposes a tariff on foreign chocolate, how are foreign producers of chocolate affected?
A) Their supply increases because they have to pay the tariff.
B) The tariff has no effect on foreign producers because Australian consumers must pay the higher price.
C) They export less to Australia.
D) Their supply is unaffected because the quota must be met by Australian producers.
E) They earn more profit because their chocolate sells for a higher price.

Question

Quizplus · Accepted Answer

If Australia imposes a tariff on foreign chocolate, it will become cheaper for Australian consumers to buy domestically produced chocolate. As a result, foreign producers of chocolate will likely export less to Australia, as their products will now be more expensive compared to locally produced chocolate.

If Australia Imposes a Tariff on Foreign Chocolate, How Are