An effective import quota:

Question

Quizplus · Accepted Answer

An import quota restricts the quantity of the imported good, which has the direct effect of lowering the available quantity of imports in the domestic market. This reduced supply can potentially lead to an increase in the price of the imported good, thereby making domestically-produced goods more attractive to consumers. However, this effect is not guaranteed and depends on market dynamics. Import quotas do not lower the price of imports nor increase federal revenues, and they may not necessarily increase the variety of goods available to the consumer.

An Effective Import Quota