Compared to an import quota,an equivalent tariff may provide a less certain amount of protection for home producers since:

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An equivalent tariff may provide a less certain amount of protection for home producers because foreign firms may be able to absorb the tariff by offering their exports at lower prices. In contrast, an import quota limits the quantity of imports that can enter the domestic market, which can result in a more certain amount of protection for home producers. Option A is incorrect because a tariff can still result in deadweight loss if it distorts production and consumption decisions. Option C is incorrect because tariffs can still be effective even with imperfectly elastic demand. Option D is incorrect because quotas can result in higher prices for the imported good due to limited supply.

Compared to an Import Quota,an Equivalent Tariff May Provide a Less