The larger the U.S. imposed per unit import tariff on a good imported and that is also produced in the U.S.

Question

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When the U.S. imposes a per unit import tariff on a good imported and produced in the U.S., it reduces the quantity demanded of the imported good, making the domestic good more attractive to consumers. This leads to a smaller U.S. consumer surplus (choice A) and a larger U.S. producer surplus (choice B). As for government revenue (choice C), it depends on the price elasticity of demand for the imported good. If demand is elastic, the tariff will reduce revenue, and if demand is inelastic, the tariff will increase revenue. Overall, all of the above choices apply.

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