Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to: Which of the above statements are true?
I.Provide higher quality goods.
II.Seek more open markets elsewhere.
III.Lower prices to be more competitive.
IV.Stop all trade with the country imposing the quotas.
A)I and II.
B)I and III.
C)II and IV.
D)I,III,and IV.
E)III only.

Question

Quizplus · Accepted Answer

Quotas limit the quantity of goods that can be imported, which can incentivize foreign suppliers to provide higher quality goods to compete within the restricted supply. Additionally, facing such restrictions, suppliers might seek more open markets elsewhere where there are fewer or no quotas, to maintain or grow their exports.

Quotas That Limit the Quantity of Imports of a Foreign