Question

1. The effect of a tariff

Select one:

a. is negligible since it applies to firms outside the U.S.

b. can lead to economies of scale for firms inside the U.S.

c. can lead to a monopoly advantage for firms inside the U.S. since they become the sole suppliers inside the U.S.

d. will be more beneficial to large firms than too small firms.

2. The monopolist faces a demand curve that

Select one:

a. is perfectly horizontal at the market price.

b. is below the marginal revenue curve.

c. is downward sloping.

d. coincides with the industry supply.