Question

Draw a Demond and supply curve for textiles in South Africa .illustrate on the graph how a specific import tariff will affect the price ,quantities consumed ,imported and domestically produced

Answer 1

The demand curve is downward-sloping, and the supply curve is an upward-sloping. They intersect at equilibrium point. A specific import tariff will increase the equilibrium price, decrease quantities consumed, decrease quantities imported, and increase quantities domestically produced.