An import quota does which of the following?
A) decreases the price of the imported goods to consumers
B) increases the price of the domestic goods to consumers
C) redistributes income away from domestic producers of those products toward domestic producers of exports
D) both a and c

Question

Quizplus · Accepted Answer

An import quota limits the quantity of goods that can be imported, which typically reduces the supply of those goods in the domestic market. This can lead to an increase in the price of both the imported goods and the domestic goods that are substitutes, benefiting domestic producers by making their products more competitive against cheaper imports.

An Import Quota Does Which of the Following