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Which of the Following Statements Is True About Import Quotas

Question 42

Multiple Choice

Which of the following statements is true about import quotas?


A) Import quotas benefit domestic producers by limiting import competition.
B) If a domestic industry lacks the capacity to meet demand, an import quota can raise the prices for domestically produced good but not the imported good.
C) Under an import quota, a lower tariff rate is applied to imports within the quota than those over the quota.
D) Import quotas benefit consumers by decreasing the domestic price of an imported good.
E) An import quota helps a foreign producer in gaining a competitive advantage in the markets of the country which imposes the quota.

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