Exhibit 18-6
-Suppose that the world price in Exhibit 18-6 is $2.00 per unit. What is the smallest import quota that would not affect the level of imports in this country?

Question

Exhibit 18-6 
-Suppose that the world price in Exhibit 18-6 is $2.00 per unit. What is the smallest import quota that would not affect the level of imports in this country?

Quizplus · Accepted Answer

The smallest import quota that would not affect the level of imports is one that is equal to or greater than the current level of imports. If the current level of imports is 100 units per month, then a quota of 100 units per month would not restrict imports.

Exhibit 18-6 -Suppose That the World Price in Exhibit 18-6 Is $2.00