Which of the Following Is True About a Lump-Sum Tariff

question 78

Multiple Choice

Which of the following is true about a lump-sum tariff?

• A) Domestic firms' marginal cost curves are shifted up by the amount of the lump-sum tariff.
• B) Foreign firms' average cost curves are shifted up by the amount of the lump-sum tariff.
• C) Domestic firms' average cost curves are shifted up by the amount of the lump-sum tariff.
• D) Foreign firms' marginal cost curves are shifted up by the amount of the lump-sum tariff.

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Definitions:

Net Sales

The sum a company receives from its sales, after accounting for returns, compensations for damaged or missing items, and discount deductions.

Gross Profit

The difference between the revenue from sales and the cost of goods sold, before deducting overheads, interest, and taxes.

Cost of Goods Sold

Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Perpetual Inventory System

A perpetual inventory system is a method of tracking inventory in real-time, with continuous updates to inventory records as sales and purchases occur.