Quotas are a greater threat to competition than tariffs because
A)Quotas allow imports but only at a higher price.
B)Tariffs are voluntary and quotas are not.
C)Quotas preclude additional imports at any price.
D)Tariffs do not reduce the quantity sold and quotas do.

Question

Quizplus · Accepted Answer

Quotas preclude additional imports at any price, meaning they limit the amount of competition a domestic industry faces from foreign producers. This can lead to higher prices for consumers and reduced efficiency in the market. Tariffs, on the other hand, allow imports but at a higher price, which may still allow for competition and market efficiency.

Quotas Are a Greater Threat to Competition Than Tariffs Because