Sweden is an importer of goose down parkas.The world price of these parkas is $500.Sweden imposes a $17 tariff on parkas.Sweden is a price taker in the parka market.As a result of the tariff,what will Sweden's price of parkas be and what will happen to the quantity of parkas purchased

Question

Quizplus · Accepted Answer

The price of parkas in Sweden will be the world price plus the imposed tariff, which is $500 + $17 = $517. Since Sweden is a price taker, they cannot influence the price of parkas in the market, hence the price will remain at $500 for other countries. The tariff will increase the cost of importing parkas into Sweden, leading to a decrease in the quantity of parkas purchased. Therefore, the answer is C: $517 and the quantity of parkas purchased will decrease.

Sweden Is an Importer of Goose Down Parkas