With a quota placed on imported sugar,increased domestic demand leads to increased sugar imports but not to higher sugar prices.

Question

Quizplus · Accepted Answer

If there is a quota placed on imported sugar, an increase in domestic demand may lead to a shortage of sugar in the market because the quota limits the amount that can be imported. This would likely lead to an increase in sugar prices as consumers compete to buy the limited supply.

With a Quota Placed on Imported Sugar,increased Domestic Demand Leads