If the demand of the domestic country is infinitely elastic, then the whole tariff will be:
The foreign producer bears the whole tariff when domestic import demand is perfectly elastic. Buyers will not accept a higher price, so the foreign producer must lower the…
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If the demand of the domestic country is infinitely elastic, then the whole tariff will be:
Answer and explanation
Correct answer A
The foreign producer bears the whole tariff when domestic import demand is perfectly elastic. Buyers will not accept a higher price, so the foreign producer must lower the price received by the amount of the tariff.
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Himachal Pradesh SET (HP SET)