Question

What is a difference between a tariff imposed by a large country and a tariff imposed by a small country?

Answer 1

Explanation:

For example, an import tariff applied by a large country will cause an increase in the domestic price of the import good; therefore, a + is placed in the first box of the table. Consider the following partial equilibrium diagram depicting two countries, China and the United States, trading a product with each other.

When a specific tariff is implemented by a small country, it will raise the domestic price by the full value of the tariff. ... The increase in the domestic price of both imported goods and the domestic substitutes reduces consumer surplus in the market. Tariff effects on the importing country's producers.