Which of the following situations will arise in the domestic market following the imposition of a tariff?

Question

Quizplus · Accepted Answer

When a tariff is imposed, it becomes more expensive for foreign companies to sell their goods in the domestic market, so imports decrease. As a result, domestic production increases to fill the gap left by the decrease in imports. However, this increased domestic production can lead to higher prices due to a lack of competition from foreign goods.

Which of the Following Situations Will Arise in the Domestic