A tariff is imposed on a good. The tariff will ________ quantity supplied, ________ quantity demanded, and ________ the price of the good in the home country.

Question

Quizplus · Accepted Answer

A tariff on a good typically increases the price of the imported good in the home country, which leads to an increase in quantity supplied by domestic producers (as they are now more competitive relative to the higher-priced imports). It decreases quantity demanded because consumers are less willing to buy the good at the higher price. Consequently, the price of the good in the home country increases.

A Tariff Is Imposed on a Good