-Refer to Figure 15.2. The diagram shows that the imposition of a tariff on imports:

Question

Quizplus · Accepted Answer

The imposition of a tariff on imports raises prices to consumers because the cost of imported goods increases. This higher price incentivizes domestic producers to increase output, thus raising domestic output. At the same time, the higher price reduces the quantity of imports as consumers switch to domestically produced goods or reduce consumption altogether.