Figure 5.6 Domestice Supply and demand for Wine - U.S.
-Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.What will happen to the price of a bottle of wine in the U.S.if a quota of 15 bottles of wine is imposed?

Question

Figure 5.6 Domestice Supply and demand for Wine - U.S. 
-Consider Figure 5.6.In the global market for wine, the EU is willing to supply as much wine as the U.S.demands at $8 per bottle.What will happen to the price of a bottle of wine in the U.S.if a quota of 15 bottles of wine is imposed?

Quizplus · Accepted Answer

When a quota is imposed, the supply is restricted, leading to a shortage if demand exceeds the quota. This typically causes the price to increase above the equilibrium price, potentially reaching $15 if demand is strong enough.

Figure 56 Domestice Supply and Demand for Wine - U