A key difference between a quota and a tariff is that
A) a quota has a larger effect on quantity than on price.
B) a tariff has a larger effect on quantity than on price.
C) the government of the importing country gains revenue from a tariff, but the price gap caused by a quota benefits domestic importers.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

The government of the importing country gains revenue from tariffs through taxes on imported goods. In contrast, quotas limit the quantity of goods that can be imported, and the price gap created by this restriction often benefits domestic importers or license holders rather than generating government revenue.

A Key Difference Between a Quota and a Tariff Is