Tariffs _______ the domestic price of the good and import quotas _______ the domestic price of the good.

Question

Quizplus · Accepted Answer

Tariffs and import quotas both serve to restrict imports into a country. Tariffs do so by imposing a tax on imported goods, making them more expensive and thus raising their domestic price. Import quotas directly limit the quantity of goods that can be imported, reducing supply in the domestic market and leading to higher prices. Therefore, both tariffs and import quotas raise the domestic price of the good.

Tariffs _______ the Domestic Price of the Good and Import