Comparing a Tariff Levied on an Import Where the Home

question 56

Multiple Choice

Comparing a tariff levied on an import where the home firm is a
Monopoly to a situation where the home firms are competitive, we
Find:

• A)the exact same result-both firms charge world price + tariff and both firms produce Q where MC = MR = world price + tariff.
• B)that the monopoly firm will be able to charge a higher price and limit its quantity.
• C)that the competitive firm will not be able to survive the impact of the tariff.
• D)that quantity is not the issue; the monopoly firm will pay its workers less and earn higher profits.

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Definitions:

Portugal

A country located on the southwestern edge of Europe, known for its rich history, cultural heritage, and significant contributions to global exploration.

Vasco Da Gama

A Portuguese explorer who was the first to sail directly from Europe to India by navigating around Africa's Cape of Good Hope.

Cape Of Good Hope

A rocky headland on the Atlantic coast of the Cape Peninsula in South Africa, historically significant as a waypoint on the sea route to the East.

The East

A term often used to refer collectively to the regions of Asia, including the Middle East, often distinguished from Western countries.