(Figure: Supply and Demand at Home) Suppose the world price is
$18, which line in the graph describes the "new" demand curve for the
Monopolist after a quota is imposed?

Question

Quizplus · Accepted Answer

When a quota is imposed, the monopolist can only sell a limited amount of goods in the domestic market. This reduces the quantity demanded at any given price, shifting the demand curve leftward. Hence, line B accurately describes the new demand curve for the monopolist after the quota is imposed.

(Figure: Supply and Demand at Home) Suppose the World Price