-Refer to Figure 15.3. From the diagram we see that if government wanted to support the same level of domestic output produced under a subsidy by using a tariff instead, the result would be:

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A tariff, compared to a subsidy, would lead to a higher price for domestic consumers, a reduction in imports and total consumption, and generate tariff revenue for the government but also result in a deadweight loss to society due to inefficiencies in the market.