Final answer:
The tariff a firm must pay when importing products like men's pants is affected by the country from which the product was imported. A cut in tariffs on imported flat screen TVs would likely lead to a decrease in their equilibrium price and an increase in the equilibrium quantity, illustrating how tariff reductions can benefit consumers by lowering prices and increasing market supply.
Step-by-step explanation:
Among the options provided, the factor that affects how much tariff a firm must pay when importing a product, such as men's pants, is C. From which country the product was imported.
Tariffs may vary by country due to trade agreements, national trade policies, and international relations.
Understanding the impact of a tariff reduction requires a four-step analysis. If the U.S. government cuts the tariff on imported flat screen televisions, the likely outcomes are:
- A reduction in the cost of production for importing these flat screen TVs.
- An increased supply of flat screen TVs in the domestic market, as importers can now bring in more units at a lower cost.
- The increase in supply leads to a decrease in the equilibrium price, as the supply curve shifts to the right.
- Finally, since the price is lower, consumers are likely to purchase more, resulting in an increase in the equilibrium quantity sold.
These changes illustrate the classic economic principle that lowering tariffs can lead to a decrease in prices and an increase in quantity sold, benefiting consumers and potentially expanding the market.