D is corrent. The tariff will increase the price of the item to domestic consumers, resulting in the reallocation of expenditures to other products.
A is incorrect. Foreign producers receive the same unit price (net of the tariff which is paid to the government), but their sales volume falls. Revenue is calculated as price times quantity so foreign producers receive lower revenues after the tariff is imposed.
B is incorrect. Domestic production of the item will expand because domestic producers are not subject to the tariff so they receive a higher price per unit.
C is incorrect. Protective tariffs increase domestic prices of the item.
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