... relatively low price would hinder the local producers' development. Along with this issue, the government has imposed protectionisms (are the act of imposing trade barriers to protect the income of domestic producers), which are quotas and tariffs. Quota is the physical limit imposed upon the amount of goods, which may be imported and tariff is tax on imports. H With this protectionism, the importers try to find a way to get the good into Indonesia. In this case, it is through black market. Figure 1 shows that black market has lowered the equilibrium price of sugar from P1 to P2. Before the black market happens, the demand and supply curves intersect in E1. When black market occurs and supply increases, the supply of India's sugar makes a horizontal line, and establishes at price P2. Domestic producers, who cannot supply sugar with lower or equal price as P2, will be diminished. The ...

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