The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
FIGURE 34- 2
-Economists would tend to accept which of the following arguments in favour of tariffs?

Question

The diagram below shows the domestic demand and supply curves for denim jeans in Canada. The prevailing world price is P W . Assume that all jeans are identical.
  FIGURE 34- 2
-Economists would tend to accept which of the following arguments in favour of tariffs?

Quizplus · Accepted Answer

Temporary tariff protection in some situations may help to generate an eventual comparative advantage in that product by allowing the domestic industry to gain experience, achieve economies of scale, and improve efficiency. This can lead to a lower cost of production, making the industry more competitive on the global market without the need for tariffs in the long run. Therefore, economists may accept this argument in favor of tariffs. The other options presented are not generally accepted by economists as valid arguments in favor of tariffs.

The Diagram Below Shows the Domestic Demand and Supply Curves