Suppose that at the current world price bananas are imported into Canada.Suppose also that domestic supply is perfectly inelastic and domestic demand has unit elasticity.If Canada were to place a tariff on imported bananas,the
A) revenues of the foreign exporters of bananas would rise.
B) quantity imported would be unaffected.
C) price of bananas in Canada would rise,but total domestic expenditures would fall.
D) quantity imported would rise.
E) price of bananas in Canada would rise,but total domestic expenditures would be unaffected.
Correct Answer:
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