An effective quota does not:
A)raises the price to consumers.
B)reduces the quantity supplied.
C)make everybody worse off.
D)creates a dead weight loss.

Question

Quizplus · Accepted Answer

While an effective quota can lead to higher prices and reduced quantity supplied, it is not necessarily the case that it makes everybody worse off or creates a dead weight loss. For instance, a quota on pollution can lead to a reduction in pollution levels and may even benefit affected communities. Therefore, option C is not always correct.

An Effective Quota Does Not