Question

Which of the following provides an explanation for tariffs decreasing market efficiency? Select one: a. Prices are not equal to the equilibrium price. b. Deadweight loss is equal to zero. c. The supply of goods is not produced by the lowest-cost suppliers. d. The supply of goods is not purchased by the buyers with the highest willingness to pay.

Answer 1

Prices are not equal to the equilibrium price.

Step-by-step explanation:

A tariff is a form of tax imposed by the government on imported goods. This is done to protect domestic producers and discourage foreign consumption.

When a tariff is set, price isn't equal to equilibrium price and there's market inefficiency.

Deadweight loss is only zero when market efficiency is achieved. Deadweight loss occurs when demand and supply aren't in equilibrium.

I hope my answer helps you.