According to the optimum tariff theory,a foreign producer will most likely ________.

Question

Quizplus · Accepted Answer

According to the optimum tariff theory, a foreign producer will most likely lower its export prices if the importing country imposes an import tax on its products. This is because the foreign producer would want to maintain its market share even if it means earning less profit per unit. By lowering export prices, the foreign producer can make up for some of the cost of the import tax and remain competitive in the market.

According to the Optimum Tariff Theory,a Foreign Producer Will Most