Daeny wrote:
Prohibitively high tariffs on salmon from Winterland allow companies in the Republic of Osum to sell salmon without any foreign competition. Some economists believe that the tariffs partly explain why Osum salmon costs one dollar more than Winterland’s salmon. If the government removed the tariffs, consumers would either purchase more Winterland salmon than they would Osum salmon or else Osum companies would have to reduce the price of their salmon.
Republic of Osum - Prohibitively High tariff on salmon from Winterland allows the country to seel without foreign competition.
Economist - Osum salmon > Winterland’s salmon. { Due to tariff }
If government removes tariff there will be 2 option available for Osum companies -
(1) Osum companies would have to reduce the price
(2) Consumers would either purchase more Winterland salmon
The conclusion reached in the last sentence depends upon which of the following assumptions?A. The legislature of Osum proposes tariffs and the Prime Minister ratifies them.
Out of scope...
B. Winterland has passed a countervailing tariff against salmon from the Republic of Osum.
Not relevant.
C. A constitutional amendment is not needed to remove the tariffs.
Out of scope.
D. Although the Republic of Osum has
lower tariffs on salmon from other countries besides Winterland, these tariffs are just as effective in eliminating all salmon imports. True , but we don't have sufficient data to claim " all salmon imports. "...
E. Osum salmon is not over one dollar better in quality than is Winterland salmon.
Possible...
The passage mentions2 option available for Osum companies to retain their sales / profit level...
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