Which of the following raises domestic prices only when demand is relatively low?
A) Domestic subsidies
B) Lump sum tariff
C) Excise tariff
D) Lump sum tariff and excise tariff

Question

Quizplus · Accepted Answer

A lump sum tariff raises domestic prices only when demand is relatively low because it is a fixed fee on imports regardless of the quantity imported, making it more impactful when demand and thus import volumes are lower.

Which of the Following Raises Domestic Prices Only When Demand