The Diagram Below Shows the Demand and Supply Curves for Refrigerators

question 80

Multiple Choice

The diagram below shows the demand and supply curves for refrigerators in Canada. FIGURE 33-1
-Refer to Figure 33-1.If we compare the effect of an import tariff with the effect of an import quota in this market,both of which cause the Canadian price to increase by the same amount,the major difference between the two policies is

• A)the quota does not directly reduce the quantity whereas the tariff does.
• B)the tariff raises revenue for the government whereas the quota benefits foreign producers.
• C)the tariff raises revenue for the protected producers whereas the quota benefits the government.
• D)the tariff does not directly affect the price consumers pay whereas the quota does.
• E)the tariff directly affects the price consumers pay whereas the quota has neither direct nor indirect price effects.

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Definitions:

Inventory Policy

Inventory policy refers to the set of guidelines or rules a company follows to manage its inventory levels, ordering, storage, and replenishment to meet customer demand efficiently.

Projected Sales

The estimated revenue that a company expects to generate from goods or services over a specific period.

Merchandise Purchases Budget

A financial plan that estimates the cost of goods that a retailer plans to buy over a certain period to maintain a desired inventory level.

Budgeted Cost

An estimated financial plan for expenditures over a specified period, often used for controlling costs.