A reason tariffs and quotas are imposed due to rent seeking is that
A) they create net benefits in the long run.
B) they reduce import dependence.
C) their costs are concentrated and their benefits are spread among many people.
D) their costs are spread among many people and their benefits are concentrated.

Question

Quizplus · Accepted Answer

Tariffs and quotas are often imposed due to rent seeking because their costs are spread among many people (e.g., consumers paying slightly higher prices) while their benefits are concentrated among a few (e.g., domestic producers protected from foreign competition). This makes it easier for the benefiting groups to lobby for these protections.

A Reason Tariffs and Quotas Are Imposed Due to Rent