U.S. Market for Bicycles
(Figure 7.1)
Small-country Tariff Case

In this module, we examine the effects of the imposition of a tariff in the case of a small country. In the graph to the left, bicycles are initially imported freely from the rest of the world at the world price of $300. At the world price, domestic consumers purchase D0 units and domestic producers are only willing to supply S0. The difference between the amount supplied by domestic suppliers and that bought by domestic consumers is supplied by foreign producers as imports.

Click on the button on the left to show the imports on the graph.
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