Explain how the tariff affects the price paid by consumers in the importing country and the price received by producers in the exporting country. Use graphs to illustrate how the prices are affected if: a. the export supply curve is very elastic (flat)
b. the export supply curve is inelastic (steep).

Answer and Explanation:

The tariff price is divided between the producer i.e. in the exporting country and the consumer i.e. importing country. In the case when the supply curve is very elastic so the producer could beer the tariff grunt and the importer could remained non-scathed.

On the other hand if the country wants to inflict a tariif on that good that contains non-elastic supply curve so in this case the consumer who he in the importing company would have to pay the larger share of the tariff

In this way it should be illustrated.

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