Increasing a tariff will the domestic quantity consumed of the good, while the domestic production of the good.

Question

Quizplus · Accepted Answer

Increasing a tariff will increase the price of the imported good, making it less competitive compared to domestic goods. As a result, consumers will reduce their demand for the imported good, leading to a decrease in domestic quantity consumed. On the other hand, domestic producers will be incentivized to increase their production as the imported good becomes more expensive, leading to an increase in domestic production of the good. Therefore, the correct choice is D, decrease in domestic quantity consumed of the good, while increasing domestic production of the good.

Increasing a Tariff Will the Domestic Quantity Consumed of the Good