Question

If the United States were to impose additional tariffs on cars imported from Japan, what would happen to the price of Japanese cars sold in the United States? What would happen to the price of American cars? What action might Japan take to continue to compete in the U.S. automobile market?

Answer 1

A. The price of Japanese cars sold in the united states will increase.

B. The price of American cars will also increase

C. Japan might decide to reduce their cost of production. Thus will help to reduce the overall costs of the cars even after the tariffs are added.

Step-by-step explanation:

A. The price of Japanese cars sold in the United States will increase. This is because the tariffs will add an extra cost to the Japanese manufacturers. So, in order to stay in business and make profit, they have to increase the price of the cars.

B. The price of American cars will also increase.This is because the as Japanese cars are now expensive, the demand for american cars will now increase. thus leading to an increase in their price, as American car manufacturers will want to make the most profit out of the sudden increase in demand.

C. Japan might decide to reduce their cost of production. Thus will help to reduce the overall costs of the cars even after the tariffs are added. Doing this will help them remain profitable without raising the prices of their cars too much