Course Hero Logo
This textbook is available atAmazon.com Logo
Marketing: The Core 8th Edition

Marketing: The Core (8th Edition)

Book Edition8th Edition
Author(s)Hartley, Kerin
ISBN9781260711455
PublisherMcGraw-Hill, Inc.
SubjectBusiness
End of Chapter
APPLYING MARKETING KNOWLEDGE
BUILDING YOUR MARKETING PLAN

Chapter 6, End of Chapter, APPLYING MARKETING KNOWLEDGE, Exercise 1

Page 173

Here is a tip:

Tariffs and quotas are the measure to protect the domestic industry from foreign competition and forms the act of protectionism. 

Explanation

A quota is a constraint placed on the volume of a good that can be imported or exported. While, tariffs are a government tax on goods or services being imported. Tariffs and quotas are imposed on the imports to protect the domestic industries. Tariffs costs are not hidden as the importer is aware of the rates he needs to pay on import. While when the government imposes quotas, the supply of the foreign goods falls, thereby raising prices and this increased price is a hidden cost for the importer. 

Verified Answer

Quotas denote a hidden tax on buyers because the government restricts the quantity that can be imported.This raises the price of the commodity being imported and the burden falls on the end users.  Tariffs are  actual government tax levied on the imported commodities.

How would you rate this answer and explanation?
Did you like this example?
Subscribe for full access
Page 173