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 amount with tariffs and equivalent quotas.

Question

Quizplus · Accepted Answer

In a small country, both tariffs and equivalent quotas restrict imports, leading to higher domestic prices and increased producer surplus by the same amount, as they both reduce foreign competition similarly.

In the Case of a Small Country,producer Surplus