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Makes no sense to me
user-26668 - 02/5/2020, 8:34 pm

This makes no sense to me because I thought the purpose of import tariffs and quotas were to shield domestic producers from foreign competition. If I'm a domestic producer, why would I raise my prices if I'm already enjoying the protection of import tariffs hurting my sales? I get that raising revenues can obviously increase profits from an accounting sense. But increasing prices also means I'm risking reduction in demand, if the fundamental law of demand still applies here.

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CPAborned-21021 - 02/6/2020, 6:02 pm

Protection against import and tariffs is a supply matter. Now that you been protected you get to supply more. Supply curve moved left, price goes up. Limited supplies, high prices.

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