Answer to Question #277801 in Microeconomics for Sania

Question

Show that if the importing country faces an upward sloping foreign supply curve (excess supply curve), a tariff may raise welfare in the importing country.

Answer 1

If the importing country faces an upward sloping foreign supply curve, then a tariff may raise welfare in the importing country, because less goods will be imported and excess supply will be exported, so more capital will come to the country and domestic production will be more profitable.