Suppose that there is no home production of a good (imports supply all home demand). If the home country then applies a tariff to this good exported by a foreign monopoly, the price net of the tariff received by the foreign monopolist is:

Question

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When a tariff is applied to a good exported by a foreign monopoly, the price net of the tariff received by the foreign monopolist is lower than under free trade. This is because the tariff effectively reduces the price that the monopolist can charge by increasing the cost to the consumer, leading to a lower net receipt for the monopolist.

Suppose That There Is No Home Production of a Good