Congresswoman Gaga represents a state in which several firms manufacture furniture.She wants to impose tariffs on all imported furniture.Which of the following is the least likely consequence of such tariffs?
A)Domestic furniture buyers will lose consumer surplus,have less variety,and will pay higher prices.
B)Domestic furniture producers will gain producer surplus.
C)Domestic furniture producers will have a higher rate of technological advance.
D)Domestic furniture producers will have more market power.

Question

Quizplus · Accepted Answer

Imposing tariffs on imported furniture will protect domestic furniture producers, leading to an increase in producer surplus and market power. However, it is unlikely to impact the rate of technological advance. In fact, competition from foreign firms often leads to greater innovation and technological progress. Option A is also likely, as domestic furniture buyers will face higher prices and less variety due to the tariffs.

Congresswoman Gaga Represents a State in Which Several Firms Manufacture