The diagram below shows supply and demand curves for bicycles in the domestic Canadian market.Assume that all bicycles are identical.
FIGURE 34- 4
-Suppose Canada has a 12% tariff on foreign- made cotton clothing.If the tariff is raised to 20%,there will be a in the Canadian price of cotton clothing,profits for domestic producers,and _ in deadweight loss.

Question

The diagram below shows supply and demand curves for bicycles in the domestic Canadian market.Assume that all bicycles are identical.
  FIGURE 34- 4
-Suppose Canada has a 12% tariff on foreign- made cotton clothing.If the tariff is raised to 20%,there will be a in the Canadian price of cotton clothing,profits for domestic producers,and _ in deadweight loss.

Quizplus · Accepted Answer

Raising the tariff to 20% will increase the Canadian price of cotton clothing, increase profits for domestic producers due to reduced foreign competition, and increase deadweight loss due to inefficiencies introduced by the higher tariff.

The Diagram Below Shows Supply and Demand Curves for Bicycles