For any import quota a country imposes, there exists a tariff the country could have imposed that will have the same impact on producers and consumers.

Question

Quizplus · Accepted Answer

This is known as the tariff quota equivalence theorem, which states that the imposition of a quota on imports is equivalent to imposing a tariff on those imports. The two policies could have different distributive effects, but their impact on domestic producers and consumers is the same.

For Any Import Quota a Country Imposes, There Exists a Tariff