If a quota is set at the same quantity of imports that results from a tariff in Country A,

Question

Quizplus · Accepted Answer

If the quota is set at the same quantity of imports as the tariff, then the quantity of goods available in Country A will be the same as under the tariff. The difference between the two policies is that under the tariff, the government collects revenue, while under the quota, the importers benefit from the limited supply and can potentially charge higher prices. However, the quantity consumed in Country A remains the same.

If a Quota Is Set at the Same Quantity of Imports