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protectionism - Coggle Diagram
protectionism
Tarrif
tax or duty placed on imported good, increases price to customer
- imports price increase, demand falls and input level falls
- consumers either don't buy or buy domestic product, may be cheaper
- effectiveness of tariff depends on price elasticity of imported good
- product is price inelastic, demand for import may be limited, this happens if domestic sub are inferior
import quotas
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- restricts supply available, prices may rise
- consumers do without or buy domestic sub, may be cheaper
- depends on price elasticity
- goods may not even be available
High prices and subsides
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higher prices- consumers pay more for imports, spend less on other things, reduces revenue
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definition- policy that restricts international trade to minimise comp from foreign businesses trying to export, using tariffs and quotas so imports are more expensive, subsidies to domestic firms