How must an import quota function in order to be effective?

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Quizplus · Accepted Answer

An import quota must restrict imports to a lower quantity than would be imported under free trade in order to be effective. By limiting the quantity of imports, it creates scarcity and drives up the price of imported goods. This protects domestic industries, as consumers will be more likely to buy domestically produced goods due to their lower cost relative to imported goods. A quota that does not restrict imports enough to reduce competition with domestic industries will not be effective in achieving its intended purpose.

How Must an Import Quota Function in Order to Be