Mai, C.-C., Peng, S.-K., & Tabuchi, T. (2008). Economic geography with tariff competition. Regional Science and Urban Economics, 38(5), 478-486.
Tariff works as a tool to have government’s control over the trade .With the help of this tool a country can increase its net revenue and maintain a healthy competition in local market but high tariff repels the foreign firms sometime.
1. Homegrown manufacturer’s ability to compete on price
2. Raise of welfare
3. Increased Government Revenue
4. Attracts foreign firms who want to establish factories in home country Limitations and drawbacks:
1. High domestic price of product
2. Discourages Trade
3. Decrease of welfare because of distortion effect
4. High transport cost of essential imported goods
Ferreira, F. A., & Ferreira, F. (2009). Maximum-revenue tariff under Bertrand duopoly with unknown costs. Communications in Nonlinear Science and Numerical Simulation, 14(9–10), 3498-3502.
Tariff helps local firms to increase their sales and profit and reduces the dependence on foreign firms. But it also increase the production cost of home manufacturers so the price of goods go up
1. Increase of sales and profit of home firms
2. Decrease in sales and profit of foreign firms
3. It reduces dependence on foreign markets
Limitations and drawbacks:
1. It increases the production cost of home manufacturers.
2. It decreases the production cost of foreign manufacturers. 3. It makes industries less competitive
Dinlersoz, E., & Dogan, C. (2010). Tariffs versus anti-dumping duties. International Review of Economics & Finance, 19(3), 436-451.
Tariff saves local firms from the dominance of foreign firms so that they can increase the productivity and it is helpful for the economy .
1. It generates revenue
2. It protects local firms
3. Increases in net export and exporter’s profit...
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