Assertion (A): A tariff imposed by a small country on its imports unambiguously reduces national welfare. Reason (R): A small country has no market power to influence world prices; hence the tariff generates no terms-of-trade gain to offset the production and consumption distortion losses. Select the correct answer:

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Economics · International Trade

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Both A and R are true, and R is the correct explanation of A.

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