Question

Can you think of instances where countries have imposed import tariffs to take advantage of their market power? Explain.

Answer 1

Tariff is a kind of tax or duty which is paid for an imported or exported goods.This tax is imposed on an imported or exported goods by the government and this tax is used for the development of the society.

Tariff is mainly imposed on imported goods by the government mainly to restrict the goods from other countries and the price of goods are increased to make the people or consumers less attractive towards forgein goods which are imported from other countries.

Tariff mainly used to increase the price of imported goods which makes the consumers less attractive. Hence the price of imported goods are high, consumers will purchase more domestic products than forgein products. Hence it protects the industry with in a country. Demand for domestic products will be high when we compare it with imported good.when the demand for the domestic products increase consumers will purchase more domestic products and increase the sale with in the market which have domestic products.