The U.S. government is considering implementing a tariff on processed vegetables imported from India. Assuming that the U.S. is an importer of processed vegetables, which of the following correctly explains the impact on the U.S. market?(1 point)

Question

Responses

The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.
The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.

The quantity of processed vegetables demanded will rise since the tariff will raise the domestic market price above the world price.
The quantity of processed vegetables demanded will rise since the tariff will raise the domestic market price above the world price.

The quantity of processed vegetables demanded will rise since the tariff will lower the domestic market price below the world price.
The quantity of processed vegetables demanded will rise since the tariff will lower the domestic market price below the world price.

The quantity of processed vegetables demanded will fall since the tariff will lower the domestic market price below the world price.

Answer 1

The correct response is:

The quantity of processed vegetables demanded will fall since the tariff will raise the domestic market price above the world price.

When a tariff is imposed on imported goods, it typically increases the price of those goods in the domestic market. As a result, consumers may reduce their demand for processed vegetables because they are now more expensive than before.