When a tariff is imposed on a good,the difference between the world price and the domestic price goes to _________,but when a quota limits the importation of the good,the difference between the world price and the domestic price goes to ________.

Question

Quizplus · Accepted Answer

When a tariff is imposed, the government collects the revenue generated from it, which is the difference between the world price and the domestic price. On the other hand, when a quota limits importation, private individuals or firms who hold the permits to import the restricted goods can benefit from the difference between the world price and the domestic price, which becomes their profit.

When a Tariff Is Imposed on a Good,the Difference Between