The effect of a tariff
A) is negligible since it applies to firms outside the U.S.
B) can lead to economies of scale for firms inside the U.S.
C) can lead to a monopoly advantage for firms inside the U.S. since they become the sole suppliers inside the U.S.
D) will be more beneficial to large firms than to small firms.

Question

Quizplus · Accepted Answer

A tariff can increase the cost of imports to the U.S., making domestically produced goods cheaper in comparison. This can lead to a monopoly advantage for firms inside the U.S. since they become the sole suppliers inside the country.

The Effect of a Tariff