ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A tariff is a tax levied on an imported good with the intent to limit the volume of foreign imports, protect domestic employment, reduce competition among domestic industries, and increase government revenue.

Detailed explanation-2: -Obviously, a tariff also generates revenues for the government of the importing country (revenue function). Tariffs therefore benefit the government and producers of the importing country in the form of tax revenues and producer surpluses at the expense of its consumers in the form of higher prices.

Detailed explanation-3: -Ultimately, quotas benefit and protect the producers of a good in a domestic economy, though the consumers end up paying more if the domestically produced goods are priced higher than imports.

Detailed explanation-4: -Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result.