-Given the imposition of a per-unit tariff in the amount of P_cP_t,price and total quantity sold (both domestically produced and imported) ,respectively,would be:

Question

-Given the imposition of a per-unit tariff in the amount of P<sub>c</sub>P<sub>t</sub>,price and total quantity sold (both domestically produced and imported) ,respectively,would be: A) 0P<sub>t</sub> and 0x B) 0P<sub>c</sub> and 0z C) 0P<sub>t</sub> and 0z D) 0P<sub>a</sub> and 0x E) 0P<sub>t</sub> and 0y

Quizplus · Accepted Answer

The imposition of a per-unit tariff increases the price from the world price to a higher domestic price, which is represented by the tariff-inclusive price. This leads to a decrease in the quantity of imports as domestic production becomes more competitive, and the total quantity sold in the market adjusts accordingly. Therefore, the correct choice involves the tariff-inclusive price and the adjusted total quantity, which corresponds to option E.

-Given the Imposition of a Per-Unit Tariff in the Amount