(Figure: Supply and Demand at Home) In the situation illustrated by
The figure, the monopoly firm's quantity produced after a quota is
Imposed ________, thus leading to a worse situation for the
Employees of the firm compared with a freetrade situation.

Question

(Figure: Supply and Demand at Home) In the situation illustrated by
The figure, the monopoly firm's quantity produced after a quota is
Imposed ________, thus leading to a worse situation for the
Employees of the firm compared with a free­trade situation.

Quizplus · Accepted Answer

When a quota is imposed, the monopoly firm's quantity produced decreases as it is now restricted to a certain amount. This leads to a worse situation for the employees as there may be layoffs or reduced wages due to the decrease in production. In a free-trade situation, the firm may have produced more, leading to more employment opportunities and potentially higher wages.

(Figure: Supply and Demand at Home) in the Situation Illustrated