At Free-Trade Prices, a Bicycle in Country X Sells for $100

Multiple Choice

At free-trade prices, a bicycle in country X sells for $100 when the per-unit cost of material inputs is $90. Country X has a nominal tariff rate of 15% on bicycles, and 10% on the material inputs. Based on this information, calculate the effective rate of protection for the bicycle industry in country X. Assume that country X is a small country.

A) 80%
B) 60%
C) 5%
D) 15%