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When the Government Imposes a Limit on Sales of a Good

Question 120

Essay

When the government imposes a limit on sales of a good or service by a quota, it usually issues a license that gives the owner the right to sell a given quantity of the good.The market price of the license is equal to:
A.the demand price of the good.
B.the wedge that represents the difference between the demand price and the supply price.
C.the quota rent.
D.the quota rent and the wedge that represents the difference between the demand price and the supply price.

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the quota rent and the wedge t...

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