Bad for importers 5. Reduces Consumer Choice Article 4 Chin, H. -Y. , Change, Y. -M. , & Chou, J. -R. (2011). A welfare analysis of tariffs and equivalent quotas under demand uncertainty: Implications for transformation. International Review of Economics & Finance, 20(4), 549-561. Tariff helps a country economy by increasing revenue. It also lowers the market price of the local products . 1. It lowers the market price 2. It increases the revenue 3. Defends industries within a country 1. It lowers the domestic output 2. It lowers the domestic profit 3.
Less development in industry sector Article 5 Sanguineous, P. , & Evolve Martinets, C. (2009). Tariffs and manufacturing location in Argentina. Regional Science and Urban Economics, 39(2), 155-167. When tariffs are high it protects local market and when tariffs are low the land price goes higher and the commuting cost also goes up so it affects the market price. 1 . Local products get more focus 2. Low land price 3. Low commuting cost 1. It results Low productivity 2. It affects manufacturing location problem which leads the market price go higher 3. Article 6 Incite, A. (2009).
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The price effect of tariff liberalizing: Measuring the impact on household welfare. Journal of Development Economics, 89(1), 19-27. Tariff makes local product cheaper but the price of the imported goods including the raw materials go higher so it affect directly to the households and manufacturers. 1 . Prohibitive tariff is there to discourage people from importing luxury items 2. Government earns revenue from tariff 3. Local products get the market 4. Lower foreign competition 5. Net positive impact on households 1. Higher the trade barrier 4. Consumers could conceivably end up paying higher prices