When a country imposes heavy tariffs on imports, market prices typically increase due to several factors associated with tariffs. Tariffs are taxes imposed on imported goods, which raise the cost of these goods in the domestic market. As the cost of imports goes up because of the tariff, consumers and businesses may face higher prices for those goods.
Additionally, the increased costs lead domestic suppliers to raise their prices as well since they can take advantage of reduced competition from foreign producers who are now more expensive due to the tariffs. This dynamic can result in an overall increase in prices for consumers, as they have fewer alternatives to choose from, and the market adjusts to reflect the higher cost structure caused by the tariffs.
In this scenario, consumers may also shift their demand towards domestic products, but the overall market price trend, driven by the additional costs of imports, tends to be upward. Thus, the imposition of heavy tariffs leads to a general increase in market prices, confirming that the correct answer is indeed that market prices typically increase.