For a home monopolist, a quota allows the firm to increase the price by _______________ they could with an equivalent tariff.

Question

Quizplus · Accepted Answer

With a quota, the monopolist restricts the quantity of imports that can enter the market, effectively limiting competition. This allows the monopolist to increase the price by a higher amount than they could with a tariff, which only adds a tax to imported goods.

For a Home Monopolist, a Quota Allows the Firm to Increase