When an import quota is imposed, the gap between the domestic price and the price received in the exporting country is captured by
A)consumers in the importing country.
B)the domestic producers of the good.
C)the government of the importing country.
D)foreign exporters.
E)the importers of the good.

Question

Quizplus · Accepted Answer

The importers of the good capture the gap between the domestic price and the price received in the exporting country because they can buy the goods at the lower world price and sell them at the higher domestic price, pocketing the difference.

When an Import Quota Is Imposed, the Gap Between the Domestic