In order for large countries to successfully use tariffs to increase well-being,
A)they must have significant market power .
B)the deadweight loss created by the tariff must be greater than the government revenue the tariff generates.
C)domestic production must increase more significantly than for the small country case.
D)domestic consumption and imports must decrease more significantly than in the small country case.

Question

Quizplus · Accepted Answer

Large countries have significant market power, which allows them to influence global prices and trade flows. This means that a tariff imposed by a large country can have a greater impact on other countries, potentially leading to lower prices for domestic consumers and increased domestic production. Additionally, a large country may have more bargaining power in international trade negotiations, giving it more leverage to secure beneficial trade deals for its economy.

In Order for Large Countries to Successfully Use Tariffs to Increase