Suppose Iran imposes a tariff on lumber.For the tariff to have any effect,it must be the case that
A)Iran is an exporter of lumber.
B)the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff.
C)the world price without the tariff is less than the price of lumber without trade.
D)the world price without the tariff is greater than the price of lumber without trade.

Question

Quizplus · Accepted Answer

For a tariff to have an effect, the world price without the tariff must be lower than the domestic price without trade, making imports cheaper and thus necessitating a tariff to protect domestic producers.

Suppose Iran Imposes a Tariff on Lumber