Let X be a product for which the output of domestic producers of a small nation at the product’s international price is smaller than the quantity demanded of it by domestic consumers at its international price. The small nation imports the difference. If the small nation imposes a tariff on the imports of X, then

Question

Answer

The price received by the domestic producers of X does not change and remains equal to the world price of the product

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The quantity produced by domestic producers of X decreases

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The profits of the domestic producers of X increase

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The profits of the domestic producers of X decrease

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Let X be a product for which the output of domestic producers of a small nation ...

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