The imposition of an import tariff by a small nation:
A)increases the relative price of the import commodity for domestic producers and consumers
B)reduces the relative price of the import commodity for domestic producers and consumers
C)increases the relative price of the import commodity for the nation as a whole
D)any of the above is possible

Question

Quizplus · Accepted Answer

Imposing an import tariff increases the price of the imported commodity, making it relatively more expensive compared to domestic alternatives. This leads to an increase in the price of the import commodity for domestic producers and consumers, resulting in higher costs for businesses and higher prices for consumers.

The Imposition of an Import Tariff by a Small Nation