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Question
Assume there is a 35 percent tariff on bananas imported into the United States. Also, assume that the market competition is at its beginning and the law of one price is not in effect. If the domestic market price of Hawaiian bananas is $1.00 per bunch, imported bananas will sell for ________ per bunch.
a. $0.35
b. $0.65
c. $1.00
d. $1.35
e. $1.65
Answer
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