Use the following to answer question:
-(Figure: The Market for SUVs)Use Figure: The Market for SUVs..A quota of _____ will bring about the same price and output in the market for SUVs as would an excise tax of $30,000.

Question

Use the following to answer question: 
-(Figure: The Market for SUVs)Use Figure: The Market for SUVs..A quota of _____ will bring about the same price and output in the market for SUVs as would an excise tax of $30,000.

Quizplus · Accepted Answer

A quota of 3,000 would restrict the quantity to the same level that an excise tax of $30,000 would, thereby resulting in the same price and output in the market for SUVs. This is because both a quota and an excise tax can be used to manipulate market outcomes by either directly limiting quantity (quota) or increasing price and thus indirectly affecting quantity (excise tax).

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