Figure 5.3 illustrates the apple market for Sweden,assumed to be a "small" country that is unable to affect the world price.SSweden is the domestic supply and DSweden is the domestic demand.SSweden+Quota is Sweden's supply schedule with an import quota.
Figure 5.3.Sweden's Apple Market

-Consider Figure 5.3.Assume that Swedish import companies behave as a monopoly buyer while foreign export companies behave as competitive sellers.Compared to free trade,Sweden's import quota results in domestic welfare:

Question

Figure 5.3 illustrates the apple market for Sweden,assumed to be a "small" country that is unable to affect the world price.SSweden is the domestic supply and DSweden is the domestic demand.SSweden+Quota is Sweden's supply schedule with an import quota.
Figure 5.3.Sweden's Apple Market
 
-Consider Figure 5.3.Assume that Swedish import companies behave as a monopoly buyer while foreign export companies behave as competitive sellers.Compared to free trade,Sweden's import quota results in domestic welfare:

Quizplus · Accepted Answer

The import quota decreases the quantity of apples imported and raises the domestic price of apples. Due to the quota, the Swedish consumers face a higher price, and the quantity demanded decreases from Q* to Q1. The producers in Sweden benefit from the higher price and increase their quantity supplied from Q* to Q2. However, the increase in the price leads to a deadweight loss of triangle BCD, which results in a total loss of $1.60 in domestic welfare compared to free trade. Therefore, Sweden's import quota results in losses totaling $1.60.

Figure 53 Illustrates the Apple Market for Sweden,assumed to Be a a "Small