Th4.1: Th4.1: Impact of Protectionist Policies on Producers

Question 1

Why do domestic producers tend to benefit from import controls?

Answer 1

since they have less competition so they can sell more goods at higher prices than otherwise and they will benefit from measures to increased exports

Question 2

However, what may they suffer from?

Answer 2

suffer from higher costs if there are controls on the imports they need for production

Question 3

Why will foreign producers lose out?

Answer 3

as they are limited in where they can sell their goods

Question 4

What is the problem here regarding efficiency and types of producers?

Answer 4

inefficient, domestic producers are kept in production

efficient, foreign producers lost out