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By Restricting the Amount of a Good That May Be

Question 49

Multiple Choice

By restricting the amount of a good that may be imported,quotas:


A) increase the price,thus causing domestic producers to sell less than they would with free trade.
B) lower the price,thus allowing domestic producers to sell more than they would with free trade.
C) increase the price and allow domestic producers to sell more at a higher price than they would with free trade.
D) lower the price,thus causing domestic producers to realize lower total revenue from the quota item.
E) simply replace foreign production with domestic production.

Correct Answer:

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