Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to:
I.Provide higher quality goods.
II.Seek more open markets elsewhere.
III.Lower prices to be more competitive.
IV.Stop all trade with the country imposing the quotas.
Which of the above statements are true?

Question

Quizplus · Accepted Answer

Quotas limit the quantity of imports, which can lead foreign suppliers to focus on providing higher quality goods to maximize their limited market access (I) and to seek other markets with fewer restrictions (II).

Quotas That Limit the Quantity of Imports of a Foreign