If Canada imposes a tariff of $5 per bottle on French wine, the most likely effect will be to raise the price of wine in Canada by:

Question

Quizplus · Accepted Answer

A tariff of $5 per bottle on French wine means that the Canadian government has imposed an additional cost of $5 on each bottle of wine imported from France. This cost will be borne by the Canadian importers of French wine, who will then pass it on to the consumers. Therefore, the price of wine in Canada is likely to increase by $5 per bottle to cover the tariff cost. Option A is incorrect because the price increase is unlikely to be more than the tariff amount. Options C and D are not possible because a tariff will not lead to a decrease in the price of the imported goods in the exporting country (France, in this case).

If Canada Imposes a Tariff of $5 Per Bottle on French