Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

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Quizplus · Accepted Answer

While deadweight losses are a potential cost associated with tariffs, they are not the only cost. Tariffs can also lead to higher consumer prices, reduced competition, and retaliation from trading partners. Quotas, on the other hand, do not directly result in deadweight losses but can lead to higher prices and reduced trade volume. Therefore, the preference for tariffs over quotas depends on specific economic and political circumstances.

Deadweight Losses Are the Only Potential Cost Associated with Tariffs,which