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Figure: The Shrimp Market
-(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the government imposes a quota limiting sales of shrimp to 250 pounds, it will have the same effect on transactions as a price floor of:
A) $17.50
B) $10
C) $7.50
D) The answer cannot be determined from the information provided.

Question

Use the following to answer questions:
Figure: The Shrimp Market 
-(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the government imposes a quota limiting sales of shrimp to 250 pounds, it will have the same effect on transactions as a price floor of:
A) $17.50 
B) $10 
C) $7.50 
D) The answer cannot be determined from the information provided.

Quizplus · Accepted Answer

A quota limiting sales to 250 pounds would create a situation where the quantity supplied is less than the quantity demanded at the equilibrium price. This would drive the price up to the level where the quantity demanded equals the quota, which is $17.50.

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