Question

Which of the following statements regarding the import tariff is/are correct?

a. A specific import tariff benefits the domestic producers by reducing both the domestic price and the quantity of imports.
b. A specific import tariff increases the domestic supply of a good and reduces its domestic price.
c. An introduction of the tariff reduces the quantity demanded of a good and increases its domestic price.

[1] Only a and b
[2] Only a
[3] Only c
[4] Only b
[5] None of the statements are correct

Answer 1

only c is correct.

a and b is not correct since import tariff reduces aggregate supply forcing domestic suppliers to increase price to meet the demand.