If Canada imposes a tariff of $1 per imported shirt, the tariff

Question

Quizplus · Accepted Answer

The tariff of $1 per imported shirt raises the price of the shirt to Canadian consumers, making it less attractive to buy foreign shirts. This leads to a decrease in imports of shirts into Canada. This could benefit Canadian shirt producers who would face less competition from foreign producers. However, this benefit to Canadian producers comes at a cost to Canadian consumers who face higher prices and a reduced variety of shirts to choose from. This results in a social loss where the overall welfare of society is reduced due to the tariff. Therefore, all of the above options apply.

If Canada Imposes a Tariff of $1 Per Imported Shirt