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Question
The U.S. federal government imposes a tariff on cheaper steel arriving from other countries. When producers make the decision to purchase domestic steel, what must first occur?
a. Producers always purchase domestic steel because the quality is superior to foreign products.
b. The price of domestic steel must be at least equal to or greater than that of foreign steel.
c. Producers never purchase domestic steel because it cant be produced as efficiently as foreign products.
d. The government must subsidize the manufacturing costs of domestic steel.
e. The price of foreign steel must be at least equal to or greater than that of domestic steel.
Answer
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