When We Compare a Tariff Levied on an Import Where

Multiple Choice

When we compare a tariff levied on an import where the home firm is a monopoly with an import tariff where the home firms are competitive, we find:

A) the exact same result-both the monopolist and the competitive firm charge the world price plus the tariff and both firms produce a quantity where MC = MR = world price plus the tariff.
B) that the monopoly firm will be able to charge a higher price and limit its quantity.
C) that the competitive firm will not be able to survive the impact of the tariff.
D) the monopoly firm will pay its workers less and earn higher profits.