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Q. |
Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers since: |
A. | A tariff has no deadweight loss in terms of production and consumption |
B. | Foreign firms may absorb the tariff by offering exports at lower prices |
C. | Tariffs are effective only if home demand is perfectly elastic |
D. | Quotas do not result in increases in the price of the imported good |
Answer» D. Quotas do not result in increases in the price of the imported good |
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