If Indonesia (which is a small country) imposes an import tariff on textile imports, we can conclude that: (a) The world price of textile rises, and Indonesia imports less. (b) The world price of textile stays constant, and Indonesia imports less. (c) The world price of textile falls, and Indonesia imports less. (d) The world price of textile stays constant, and Indonesia imports the same as before.  Explain why.

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Protective Tariffs

A tariff is a kind of tax that is charged on exported and imported items. It means tariff is charged on both kinds of goods i.e., exported and imported. However, some goods may be exempted from this kind of tariff. Protective Tariffs refer to the charges which a country charged on imported goods to protect its domestic market. It also protects countries Industrialists in their Production. So, that their markets remain intact and do not get dumped by outside supply.