Tariffs and quotas create a loss in social welfare because
A) producer surplus declines.
B) revenues from tariffs are misspent.
C) consumer surplus declines.
D) All of the above.

Question

Quizplus · Accepted Answer

Tariffs and quotas typically result in higher prices for consumers, which reduces consumer surplus. This is because consumers have to pay more for the same goods or are unable to purchase as much as they would without these trade barriers.

Tariffs and Quotas Create a Loss in Social Welfare Because