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Brief description: A tariff is a tax on goods being imported into the country. This will have the effect of shifting the supply curve upwards by the amount of the tariff.

Detailed description: In the diagram the world price is initially Sworld. At this price UK firms will supply OD and the level of imports will be DH. The imposition of a tariff will shift the world supply curve to Stariff. This will have the effect of increasing UK production to OE and reducing imports to EG. The government will also gain revenue from the tariff equivalent to the area KLMN. The tariff will however, result in a deadweight resource loss equal to the triangles LMP and KLJ. The green shaded area is the amount spent on imports before the tariff and the blue shaded area is the amount spent after the tariff.