Exhibit 19-8

-If the country in Exhibit 19-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted, the gain to those awarded the right to import the 50 units and sell it at the new domestic price is represented by area

Question

Exhibit 19-8
 
-If the country in Exhibit 19-8 is initially trading without restrictions at a world price of $2.00 and an import quota of 50 units per month is enacted, the gain to those awarded the right to import the 50 units and sell it at the new domestic price is represented by area

Quizplus · Accepted Answer

The gain to those awarded the right to import the 50 units and sell it at the new domestic price is represented by the area above the world price and below the domestic price, which is area c + d.

Exhibit 19-8 -If the Country in Exhibit 19-8 Is Initially Trading Without