Why did the U.S. price of imports of compact trucks (like the Toyota Tacoma) not increase by 25% when the U.S. Customs Service reclassified them as "complete or unfinished trucks" with a tariff of 25%?
a. U.S. truck dealers that retailed imported compact trucks lowered their retail prices and absorbed part of the tariff.
b. U.S. consumers negotiated lower retail prices from U.S. truck dealers selling imported compact trucks.
c. The U.S. government decided not to collect the 25% tariff on imported Japanese compact trucks and instead made them subject to voluntary export restraints.
d. Japanese truck manufacturers lowered their prices on trucks sold in the U.S. market and absorbed part of the tariff.
Ans: d. Japanese truck manufacturers lowered their prices on trucks sold in the U.S. market and absorbed part of the tariff.
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