While a large country can either be better off or worse off due to the imposition of a tariff, the same country will necessarily be worse off as a result of imposing an equivalent import quota.

Question

Quizplus · Accepted Answer

Both tariffs and import quotas can make a large country better or worse off depending on various factors such as the structure of the market, the terms of trade, and the distribution of the benefits. Neither policy necessarily results in a country being worse off.

While a Large Country Can Either Be Better Off or Worse