In Italy, the domestic market demand for rice is P = 100 -2Q, and the domestic market supply of rice is P = 10 + Q. If the world price of rice is 20, how will consumer surplus change when Italy goes from autarky to be open to trade?     It will decrease by 1200.     It will increase by 700.     It will decrease by 700.     It will increase by 1200.

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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.