A $100 specific tariff provides home producers more protection from foreign competition when:
A) The home market buys cheaper products rather than expensive products
B) It is applied to a commodity with many grade variations
C) The home demand for a good is elastic with respect to price changes
D) It is levied on manufactured goods rather than primary products

Question

Quizplus · Accepted Answer

A specific tariff is a fixed fee per unit, so it provides more protection when applied to cheaper products because the tariff represents a larger percentage of the product's price, making imports relatively more expensive compared to domestic goods.

A $100 Specific Tariff Provides Home Producers More Protection from Foreign