A Tariff Is MOST Likely to _____ Prices and _____

question 229

Multiple Choice

A tariff is MOST likely to _____ prices and _____ domestic consumption of the good or service being protected.

• A)decrease;increase
• B)increase;decrease
• C)have no effect on;not change
• D)decrease;decrease

---

Definitions:

Price-discriminating Monopolist

A monopolist that charges different prices to different consumers or groups of consumers for the same product, not based on cost differences.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater than one indicating a strong response.

Raise Profits

The process of increasing a company's profits through different methods such as reducing costs, increasing sales, or improving productivity.