The producer surplus gained from an import tariff is always equal to the consumer surplus lost.

Question

Quizplus · Accepted Answer

The producer surplus gained from an import tariff is not always equal to the consumer surplus lost. An import tariff typically increases the price of imported goods, which can benefit domestic producers by making their goods more competitive, thus increasing producer surplus. However, this also means consumers have to pay more for these goods, leading to a loss in consumer surplus. The loss in consumer surplus is often larger than the gain in producer surplus because the tariff also results in inefficiencies and deadweight losses in the market.

The Producer Surplus Gained from an Import Tariff Is Always