The following graph shows the demand for and the supply of a good in a country. If the world price of the good is $2.00 per unit, the import quota that would least affect the level of imports in this country is_____.

Question

Quizplus · Accepted Answer

At the world price of $2.00 per unit, the quantity demanded is 150 units per month and the quantity supplied is 50 units per month. Therefore, the country is importing 100 units per month. To least affect the level of imports, the import quota should be set at 100 units per month (the same as the current level of imports). So, the answer is D.

The Following Graph Shows the Demand for and the Supply