Question
17. If, under perfectly competitive conditions, a small foreign country imposes a tariff of 10 on a good exported by the domestic country, the optimal
17. If, under perfectly competitive conditions, a small foreign country imposes a tariff of 10 on a good exported by the domestic country, the optimal reaction of the domestic country should be to:
(a) to impose a tariff smaller than 10 on a good exported by the foreign country if the domestic country is small
(b) to impose a tariff larger than 10 on a good exported by the foreign country if the domestic country is large
(c) to impose a tariff larger than 10 on a good exported by the foreign country if the domestic country is large
(d) to impose a tariff smaller than 10 on a good exported by the foreign country if the domestic country is large
(e) none of the above
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