Suppose That a Large Country Imposes Optimal Tariffs on Imports

Multiple Choice

Suppose that a large country imposes optimal tariffs on imports from another large country. The second country then responds with optimal tariffs on imports from the first country. For these two countries, the Nash equilibrium results in _____ for the first country and _____ for the second country.

A) losses; losses
B) gains; gains
C) losses; gains
D) gains; losses