The effect of a tariff on a foreign monopolist is similar to a large nation imposing a tariff on a small nation. What is the implication for the welfare of the home nation?
A) Only very large tariffs bring any benefit to the home nation.
B) No tariffs are the best policy; all tariffs have a deadweight net loss.
C) Small tariffs can be beneficial, but only to a certain point.
D) The foreign producer may actually raise prices to make the tariff impossible to impose.
Correct Answer:
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