Final answer:
When a country imposes a tariff on a good like chips, it increases the cost for consumers and may lead to a decrease in the quantity of imported chips demanded. Domestic chip producers may benefit, but it could also result in higher prices and reduced choices for consumers.
Step-by-step explanation:
When a country imposes a tariff on a good, it is essentially placing a tax on imports of that good. In this case, if the country imposes a tariff on chips, it will make imported chips more expensive for consumers. As a result, consumers will buy fewer imported chips and may turn to domestic producers for chips instead.
However, it's important to note that the impact of a tariff on chips will also depend on the price elasticity of demand for chips and the availability of domestic substitutes. If the demand for chips is highly elastic, meaning consumers are sensitive to price changes, then the tariff may lead to a larger decrease in the quantity of imported chips demanded. On the other hand, if there are no or limited domestic substitutes for chips, the tariff may have a smaller effect on the quantity of chips consumed.
Overall, the imposition of a tariff on chips can be seen as a protectionist measure aimed at promoting domestic industries. It may benefit domestic chip producers by increasing demand for their products, but it could also lead to higher prices and reduced choices for consumers.