Welfare effects of tariff, International Economics

Welfare Effects of Tariff can be understood as follows:

It is important to understand what the welfare effects for the tariff are. While a tariff might seem desirable because it generates revenue, and might help in protecting domestic producers, it can often leave the domestic consumers quite worse off. This is because domestic producers only have to compete with the higher price of the imported goods, not with the actual price of those goods are being produced at. Thus the domestic consumers in a way are forced to consume the goods produced by less the efficient domestic producers.

 

 

Posted Date: 7/19/2012 4:18:10 AM | Location : United States







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