Question

A monopoly firm's use of a tariff provides it with additional protection because the tariff:

Answer 1

A monopoly firm's use of a tariff provides it with additional protection because the tariff reduces competition from imports by raising the import price.

Option C

Explanation:

A monopoly business is a price-maker, even through the amount, it generate it can control the market rate. When selling less and it can sell far less and can sell more and sell just because the price drops. when making less because it can sell more.

This is due to the fact that the tariff basically transfers the profits out of the international monopolist to the national government.

The monopolist's revenues are limited to an amount provided by the Horizontal stripe when the tax is introduced. Therefore, the tariff increases the total domestic social security as it reduces the profits of the foreign company.