What Is an Ad Valorem Import Duty

question 7

Multiple Choice

What is an ad valorem import duty?

• A) A requirement that a parent buys the output of a foreign subsidiary
• B) A tariff charged by a government on the invoice price of goods coming into its country
• C) A requirement that a subsidiary acquires its material inputs from a foreign parent
• D) A tax charged on intercompany transactions

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Definitions:

Price Elasticity

A measure of how much the demand for a good or service changes in response to a change in its price.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Japanese Firm

A business entity operating in Japan, characterized by specific cultural, management, and operational practices distinct to the Japanese economic and business environment.

Demand Curves

A demand curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.