Exhibit 34-12

-Refer to Exhibit 34-12.P_W is the price that exists in a free world market.If the U.S.imposes a quota to reduce imports to Q₄ - Q₃,price will rise to

Question

Exhibit 34-12 -Refer to Exhibit 34-12.P_W is the price that exists in a free world market.If the U.S.imposes a quota to reduce imports to Q₄ - Q₃,price will rise to

Quizplus · Accepted Answer

The quota reduces the supply of imports, shifting the supply curve to the left. This causes the price to rise to P1, the equilibrium price in the domestic market.

Exhibit 34-12 -Refer to Exhibit 34-12.PW Is the Price That Exists in Price

Exhibit 34-12 -Refer to Exhibit 34-12.P_W Is the Price That Exists in Price