A tariff on a product makes
A)domestic sellers better off and domestic buyers worse off.
B)domestic sellers worse off and domestic buyers worse off.
C)domestic sellers better off and domestic buyers better off.
D)domestic sellers worse off and domestic buyers better off.

Question

Quizplus · Accepted Answer

Tariffs are taxes imposed on imported goods. When a tariff is imposed on a product, the price of the imported product increases. Domestic sellers are better off because their competition from foreign sellers is reduced and they can increase their prices without losing market share. On the other hand, domestic buyers are worse off because they have to pay higher prices for the product due to the tariff. Therefore, the correct choice is A.

A Tariff on a Product Makes