U.S. tire producers did not support the 2009 tariff on Chinese tire imports because U.S. producers that also produce tires in China would have experienced a(n) ___________ in their ___________.
A) increase; consumer surplus
B) increase; producer surplus
C) decline; consumer surplus
D) decline; producer surplus

Question

Quizplus · Accepted Answer

If a tariff had been imposed on Chinese tire imports, it would have raised the price of these imports, but also would have given U.S. tire producers an opportunity to raise their prices. However, since some U.S. firms also produce tires in China, they would have experienced a decline in their producer surplus, which is the difference between the market price and the cost of production. Therefore, U.S. tire producers did not support the 2009 tariff on Chinese tire imports as it would have resulted in a decline in their producer surplus.

US Tire Producers Did Not Support the 2009 Tariff on Chinese