If a country imposes a $10 tariff on a foreign monopolist, the domestic price (including the tariff) will rise by:

Name: If a country imposes a $10 tariff on a foreign monopolist, the domestic price (including the tariff) will rise by:
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Question

Quizplus · Accepted Answer

The domestic price will rise by less than $10 because the foreign monopolist may decide to absorb some of the tariff in order to maintain market share, reducing the amount of price increase passed on to consumers.

If a Country Imposes a $10 Tariff on a Foreign