A tariff is imposed on a good. The tariff will ________ the domestic quantity supplied, ________ the domestic quantity demanded, and ________ price in the home country.
A) increase; decrease; increase
B) increase; remain unchanged; remain unchanged
C) increase; increase; increase
D) increase; decrease; decrease

Question

Quizplus · Accepted Answer

A tariff increases the domestic quantity supplied as domestic producers can compete better with higher-priced imports, decreases the domestic quantity demanded due to higher prices, and increases the price in the home country.

A Tariff Is Imposed on a Good