Tariffs

A way to restricting trade is to apply a tariff on incoming goods, making the imports more expensive. The tariff is applied by the government where the demand for imports will reduce but increase the demand for domestic goods because they will be cheaper than imports. With the price of the good after the tariff is implied, making the product expensive, the demand for the product reduces from Qd to Qc but supply of the domestic goods increased from Qa to Qb. The blue section on the graph in the profit the government makes from the tariff.