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So let's say you'd have to pay a dollar more for a higher quality product that costs two dollars. That's twice the price, and hard for you to justify. Now, ima
by cbsmith 8y ago
So let's say you'd have to pay a dollar more for a higher quality product that costs two dollars. That's twice the price, and hard for you to justify.
Now, imagine that someone puts a tariff in place so that the low quality product now costs ten dollars, and the higher quality product costs eleven dollars. Sure, you might still buy the lower cost product, but if you are going to buy the product at all, the incremental cost of spending eleven dollars instead of ten dollars seems much more worth it. As long as you have to spend ten bucks anyway, might as well spend eleven and get a higher quality good.