An import quota does which of the following?

Question

Quizplus · Accepted Answer

An import quota restricts the quantity of foreign goods that can be imported into a country, which reduces competition and increases the price of domestic goods to consumers. It does not decrease the price of imported goods to consumers, as there is usually a shortage of supply. While it may increase domestic quantity demanded in the short run, in the long run, it can harm domestic producers by reducing incentives for innovation and competitiveness. Therefore, the best choice is (B).

An Import Quota Does Which of the Following