An export quota agreement to stabilize the price of bauxite tends to be more successful when the member producer countries as a percentage of the world's producer countries is __________ and the _________ it is for the member producer countries to store/stock pile bauxite?
Correct answer: D. relatively large; easier
- A. relatively small; more difficult
- B. relatively small; easier
- C. relatively large; more difficult
- D. relatively large; easier
Explanation
A producer quota is more effective when member countries control a large share of world output, since non-members cannot easily replace the restricted supply. Easier stockpiling also helps producers withhold surplus bauxite and stabilize prices.
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