When a tariff is imposed on imports, domestic producer surplus:
A) falls.
B) rises.
C) stays the same.
D) becomes negative.
E) is indeterminate.

Question

Quizplus · Accepted Answer

When a tariff is imposed on imports, domestic producer surplus rises because the tariff makes imported goods more expensive, reducing competition for domestic producers, which can lead to higher prices and sales for them.

When a Tariff Is Imposed on Imports, Domestic Producer Surplus