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This paper examines the liberalization of a common tariff when imported varieties vary in quality and cost. Varieties of higher quality and/or lower costs are imported at lower absolute demand elasticities and also to earn higher revenues. By virtue of larger demand elasticities, low revenue varieties benefit the most from tariff liberalization. Further, if varieties are substitutable, low revenue varieties may benefit at the expense of high revenue varieties. These predictions are confirmed using a case study of US Uruguay Round tariff cuts, where within products, low revenue exporters experienced large gains, and high revenue exporters experienced negligible gains.
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