In 2012 the United States government tightened the import quota on sugar by decreasing the quantity of sugar that could be imported. Which of the following groups would gain from this change?
I. U.S. consumers of sugar
II. U.S. producers of sugar
III. Foreign producers of sugar

Question

Quizplus · Accepted Answer

II only. By tightening the import quota on sugar, the U.S. government reduces the supply of sugar in the domestic market. This typically leads to higher prices, which benefits U.S. producers of sugar by increasing their revenues. U.S. consumers of sugar and foreign producers of sugar would likely be harmed by this policy due to higher prices and reduced market access, respectively.

In 2012 the United States Government Tightened the Import Quota