Creating Market Power Through the Use of Tariffs or Quotas

question 22

Multiple Choice

Creating market power through the use of tariffs or quotas can

• A)drive price to the monopoly level.
• B)increase the world price of the good that is targeted.
• C)increase government revenue.
• D)All of the above.

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Definitions:

Initial Cost

The total expense incurred to acquire an asset or start a project, including purchase price and all associated fees.

Accounting Break-even

The point at which total costs and total revenues are equal, leading to neither profit nor loss.

Variable Costs

Costs that vary directly with the level of output or production, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period, such as rent or salaries.