Similar to import tariffs import quotas tend to result in ?
Correct answer: A. higher prices and reduced imports
- A. higher prices and reduced imports
- B. increased government revenue
- C. increased consumer surplus
- D. decrease producer surplus
Explanation
An import quota restricts supply from abroad, pushing the domestic price upward and reducing the quantity imported. Unlike a tariff, it does not necessarily generate government revenue because the quota rents may go to licence holders.
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