cents, which is the price where the quantity demanded is seven tons greater than the domestic quantity

supplied. Conversely, if Brazil can export only seven tons of sugar, then the price of sugar in Brazil will be 14

cents per pound, which is the price where the domestic quantity supplied in Brazil is seven tons greater than

domestic demand.

In general, when a country sets a low or medium tariff or import quota, the equilibrium price and quantity will

be somewhere between those that prevail with no trade and those with completely free trade. The following

Work It Out explores the impact of these trade barriers.

Access for free at openstax.org
20.1 • Protectionism: An Indirect Subsidy from Consumers to Producers 477

WORK IT OUT

Effects of Trade Barriers
Let’s look carefully at the effects of tariffs or quotas. If the U.S. government imposes a tariff or quota sufficient to
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