A tariff affects imports
A)by limiting quantity and raising price to a higher level.
B)by reducing quantity demanded so that supply falls.
C)by increasing supply, raising price, and reducing demand.
D)by raising price and reducing quantity demanded.

Question

Quizplus · Accepted Answer

A tariff is a tax on imports which raises the price of the imported goods. Therefore, it makes them less attractive to consumers, which results in a reduction in the quantity demanded. This explains why the best choice is D, where a tariff raises price and reduces quantity demanded.

A Tariff Affects Imports