Question

How does protectionism affect the price of the protected good in the domestic market?

Short answer

On one hand protectionism protect the domestic market but on the other hand, it also causes domestic consumers to pay more.

Step-by-step solution

Step 1. Meaning of protectionism.

Policies implemented by government to restrict international trade to help domestic industries. It is usually implemented with the motto to improve economic activity within a domestic economy as well as for safety and quality concerns.

Step 2. Protectionism affecting the price of the protected good in the domestic market.

Basically, when the government implemented protectionist policies to protect the domestic market it resulted into the raise of the prices of the protected goods in the domestic market causing domestic consumers to pay more, and domestic producers to earn more.