Answer to Question #137712 in Macroeconomics for shambhavi

Question

company wish to import Computer Chips, inspite of being manufactured domestically. Government of India decided to impose import tariff on the chips imported. Taking arbitrary domestic demand and supply schedule, domestic and international price and tariff imposed, explain graphically how this decision will affect domestic consumer, domestic producer, Importer, and Government revenue

Answer 1

This decision will decrease domestic consumer surplus, increase domestic producer surplus, decrease importer revenue, and increase government revenue.