The figure given below shows the domestic demand (Dd) and supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of quota, the total available supply curve becomes Sd + QQ.
If the government auctions the quota licenses, the importing nation will:
A) lose $10 million.
B) lose $29.75 million.
C) gain $31.5 million.
D) gain $21.5 million.
Correct Answer:
Verified
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