Describe price–quantity effects

Question

Describe price–quantity effects of this tariff to

(a) domestic consumers,

(b) domestic producers, and

(c) foreign exporterts

Answer 1

A tariff of P_wP_t 

(a) harms domestic consumers through increasing price from P_w to P_t  and reducing consumption from Q_e to Q_d;

(b) aids domestic producers through the raise in price from P_w to P_t & the expansion of domestic production from Q_a to Q_b;

(c) harms foreign exporters through declining exports from Q_aQ_e to Q_bQ_d.