Give an intuitive explanation for optimal tariff argument

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Reference no: EM131107395

Give an intuitive explanation for the optimal tariff argument.

A. In a large country, a tariff or quota can favorably shift the terms of trade such that the tariff revenue exceeds the welfare loss.

B. In a large country, a tariff or export subsidy can favorably shift the terms of trade such that the tariff revenue exceeds the welfare loss.

C. In a small country, a tariff or quota can favorably shift the terms of trade such that the tariff revenue exceeds the welfare loss.

D. In a small country, a tariff or export subsidy can favorably shift the terms of trade such that the tariff revenue exceeds the welfare loss.

Reference no: EM131107395

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