After a tariff is imposed,consumers must pay a price equal to the
A) world market price.
B) domestic equilibrium price when there is no trade.
C) world market price plus the tariff.
D) world market price less the tariff.
E) domestic equilibrium price when there is no trade plus the tariff.

Question

Quizplus · Accepted Answer

When a tariff is imposed, an additional cost is added to the world market price, which is the tariff itself. Therefore, consumers must pay a price that equals the world market price plus the tariff in order to purchase the imported good. The other answers (A, B, D, E) do not take into account the additional cost of the tariff.

After a Tariff Is Imposed,consumers Must Pay a Price Equal