Suppose That a Tariff Is Imposed on Imported Cheese

question 31

Multiple Choice

Suppose that a tariff is imposed on imported cheese.This will have the effect of __________ the price of cheese,__________ consumers' surplus,and __________ producers' surplus.

• A) increasing; increasing; increasing
• B) decreasing; decreasing; decreasing
• C) increasing; increasing; decreasing
• D) increasing; decreasing; increasing
• E) decreasing; decreasing; increasing

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Definitions:

Market Structure

The characteristics of an industry that define the likely behavior and performance of its firms. The primary characteristics are the number of firms in the industry, whether they are selling a differentiated product, the ease of entry, and how much control firms have over output prices. The most commonly discussed market structures are pure competition, monopolistic competition, oligopoly, pure monopoly, and monopsony.

Product Development

The process of bringing a new product or service to the market, which includes ideation, design, development, testing, and launching.

Differentiation

The process by which companies distinguish their products or services from others in the market to create a perceived value and gain a competitive edge.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for competitive pricing and product differentiation.