Similar to import tariffs, quotas on imports result in

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Quotas on imports result in limiting the supply of imported goods which leads to higher prices for domestic consumers. This is because the domestic producers can charge a higher price due to reduced competition from imports. The consumer surplus may reduce due to increased prices, and there may be a redistribution of the consumer surplus to the domestic producers in the form of increased producer surplus. However, the overall welfare effects are ambiguous as it may result in inefficient allocation of resources and deadweight loss. Foreign consumers may not be affected directly by quotas, but they may face higher prices due to reduced competition in the domestic market.

Similar to Import Tariffs, Quotas on Imports Result in