Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.

Name: Tariffs cause deadweight loss because they move the price of an imported product closer to the equilibrium without trade, thus reducing the gains from trade.
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Question

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Tariffs create a wedge between the domestic and world prices of a good, leading to a reduction in the quantity traded and a loss of consumer and producer surplus.

Tariffs Cause Deadweight Loss Because They Move the Price of an Imported