Which of the Following Statements About a Tariff Is True

question 43

Multiple Choice

Which of the following statements about a tariff is true?

• A) A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and increases total surplus.
• B) A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and reduces total surplus.
• C) A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and reduces total surplus.
• D) A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.

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Definitions:

Oligopolistic Market

A market structure characterized by a small number of firms that have significant control over market prices and competition.

Homogeneous Products

Products that are essentially identical, offered by different firms within a market, with no product differentiation.

Differentiated Products

Goods that are distinguished from similar products based on quality, features, and branding to create perceived differences appealing to diverse consumer segments.

Standardized Products

Products that are uniform in quality and specifications across producers and can be interchangeably used, often traded on futures exchanges.