A country is more likely to have net welfare gains when it imposes a
Tariff on a foreign monopolist if:

Question

Quizplus · Accepted Answer

When a country imposes a small tariff on a foreign monopolist, it can still benefit from the revenue generated by the tariff while not significantly distorting the market or creating deadweight losses. This can lead to net welfare gains for the country. When the tariff is large, it may lead to retaliation from the foreign country or greater deadweight losses in the domestic market. Large tariff revenues do not necessarily lead to net welfare gains and may simply be a transfer of income from consumers to the government.

A Country Is More Likely to Have Net Welfare Gains