The effects of a tariff are
A) reduced quantity supplied overall, reduced quantity supplied by domestic producers, and a lower price.
B) reduced quantity supplied overall, increased quantity supplied by domestic producers, and a higher price.
C) reduced quantity supplied overall, decreased quantity supplied by domestic producers, and a lower price.
D) identical to the effects of a quota, except that the price of the good is higher.

Question

Quizplus · Accepted Answer

Tariffs are taxes on imported goods that make these goods more expensive. This leads to a reduced overall quantity supplied of the good (as imports decrease due to the higher price), an increased quantity supplied by domestic producers (as they can now compete more effectively against the higher-priced imports), and a higher price for the good in the domestic market.

The Effects of a Tariff Are