Final answer:
An ad valorem duty is a tariff that represents a certain percentage of the value of a product. If the U.S. reduces tariffs on imported flat screen TVs, the equilibrium price is expected to fall and the quantity sold to increase.
Step-by-step explanation:
A duty that represents a certain percentage of the value of a particular product is known as a ad valorem duty. Ad valorem is a Latin phrase meaning 'according to value', and it is a common method of levying tariffs. These taxes on imported goods are often used by nations to generate revenue and protect domestic industries by making foreign products more expensive.
If the U.S. government cuts the tariff on imported flat screen televisions, we can expect that the equilibrium price will generally decrease, making these TVs less expensive for consumers. Subsequently, the quantity demanded is likely to increase because the lower price makes the product more accessible to a larger number of consumers. This could lead to an increase in the quantity of flat screen TVs sold in the market.