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Suppose that at the current world price bananas are imported into Canada. Suppose also that domestic ...

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Suppose that at the current world price bananas are imported into Canada. Suppose also that domestic ...

Suppose that at the current world price bananas are imported into Canada. Suppose also that domestic supply is perfectly inelastic and domestic demand has unit elasticity. If Canada were to place a tariff on imported bananas, the

▸ price of bananas in Canada would rise, but total domestic expenditures on bananas would be unaffected.

▸ revenues of the foreign exporters of bananas would rise.

▸ quantity imported would be unaffected.

▸ quantity imported would rise.

▸ price of bananas in Canada would rise, but total domestic expenditures on bananas would fall.

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Microeconomics

Edition: 17^th

Author: Ragan

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