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My-Brain-Is-Full
Mar 14, 2007, 02:38 AM
I've been reading up on the effect of imposing tariffs on domestic and international suppliers. A tariff imposed by the domestic government will cause the price of imported goods to rise, thereby stimulating demand for domestic versions of the good. Domestic supply will therefore rise and imports will fall.
However, I've become confused by a concluding statement on the effects of imposing tariffs that I read in a textbook, namely:
"domestic producers gain but at the expense of domestic suppliers."
I don't understand the difference between a domestic producer and supplier in this context.

... I think it means domestic suppliers as in those who supply to the domestic market (so they could include foreign firms). However, the textbook specifically used the term domestic supplier to refer to home based suppliers beforehand.

ordinaryguy
Mar 14, 2007, 03:50 AM
I think it's a misprint. The statement doesn't make any sense. Textbooks are often poorly edited, so beware.

My-Brain-Is-Full
Mar 15, 2007, 05:02 PM
Thanks, I was hoping that was the case, although this book has been unusually helpful so far. It makes more sense than Begg's work anyway.