Honduras is an importer of goose-down pillows. The world price of these pillows is $50 . Honduras imposes a $7 tariff on pillows. Honduras is a price-taker in the pillow market. As a result of the tariff, the price of goose-down pillows in Honduras

a. remains at $50 and the quantity of goose-down pillows purchased in Honduras decreases.
b. increases to $57 and the quantity of goose-down pillows purchased in Honduras decreases.
c. increases to a new price between $50 and $57 and the quantity of goose-down pillows purchased in Honduras decreases.
d. increases to a new price above $57 and the quantity of goose-down pillows purchased in Honduras remains the same.


b

Economics

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