International Trade Restrictions (Study Plan 7.3) Use the information on the U.S. wholesale

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Tariffs refer to the trade barriers that limit international trade by raising the price of foreign goods in the domestic country.

Explanation
The imposition of tariff raises the world price of flower R containers in Country U's market from $125 per container to $150 per container. It compels the wholesalers, who are the consumers of containers, to reduce the quantity demanded from 12 million to 9 million containers per year. The consumers lose a part of their surplus as a result of a higher price and a lower quantity.

The growers in Country U who are the producers of containers gain as they now can charge higher prices and therefore increase the quantity supplied from 2 million to 4 million containers per year. The government gains as it earns revenue from the imposition of tariffs.

Verified Answer
The producers of containers and the government of Country U gain, while the consumers and the wholesalers of containers lost from the tariff.