When a country imposes a new tariff on imported rice to protect its rice farmers, which of these amounts would be the largest in value?

Question

Quizplus · Accepted Answer

The loss of consumer surplus by domestic rice consumers is typically the largest in value because consumers end up paying higher prices for rice, both the imported and domestically produced varieties. This reduces their overall welfare more than the tariff increases government revenue, benefits domestic producers, or creates deadweight loss.

When a Country Imposes a New Tariff on Imported Rice