In the case of a small country,producer surplus
A)increases more with a tariff than with an equivalent quota.
B)increases more with a quota than with an equivalent tariff.
C)is not changed by tariffs or quotas.
D)increases the same with tariffs and equivalent quotas.
E)increases more with quotas.

Question

Quizplus · Accepted Answer

In a small country, both tariffs and equivalent quotas restrict imports and raise domestic prices, leading to an increase in producer surplus by the same amount.

In the Case of a Small Country,producer Surplus