Answer to Question #80701 in Economics of Enterprise for nosihle

Question

As a result of pressure from the Southern African Clothing and Textile Workers Union (SACTWU), the South African government has decided to increase the tariff on textiles. Explain who would gain and who would lose as a result of the decision taken by the South African government. (

Answer 1

Raising tariffs leads to higher prices. And who will benefit from rising prices? Of course, companies of clothing and textile industries will gain, because they will receive more revenue and more profits for goods. Consumers will lose. Their income is not increasing, and they will be able to buy these products in less quantity. They will spend more money on their clothes and will not be able to spend money on something else useful. For example, on studying.