Foreign producers who hold quota rights may earn greater profits with the imposition of a quotA.

Name: Foreign producers who hold quota rights may earn greater profits with the imposition of a quotA.
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Question

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If a quota is imposed, the domestic price of the product is likely to increase, making foreign producers who hold quota rights more competitive in the market and allowing them to earn greater profits. This is because they are able to supply a larger percentage of the market at the higher price.

Foreign Producers Who Hold Quota Rights May Earn Greater Profits