Question

When a country imposes an import ban on a product, there will be

a) an increase in supply, a decrease in the price consumers have to pay for the product, and a decrease in the quantity available for them to buy.
b) an increase in supply, a decrease in the price consumers have to pay for the product, and an increase in the quantity available for them to buy.
c) a decrease in supply, an increase in the price consumers have to pay for the product, and a decrease in the quantity available for them to buy.
d) a decrease in supply, a decrease in the price consumers have to pay fo the product, and an increase in the quantity available to them.

Answer 1

Imposing an import ban leads to decreased supply and increased prices for consumers, along with a reduction in the available quantity of the banned product.

Step-by-step explanation:

When a country imposes an import ban on a product, the immediate effect is c) a decrease in supply, an increase in the price consumers have to pay for the product, and a decrease in the quantity available for them to buy. This situation occurs because the import ban reduces the total amount of the product that is available in the domestic market, which causes local suppliers to provide less of the product at higher prices. Therefore, consumers face higher costs and have fewer products to choose from, which leads to a reduction in consumer surplus. Protected domestic industries may benefit from such an import ban since it can lead to higher prices for their products within the local market.