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Figure: The Market for Calculators
-(Figure: The Market for Calculators) Look at the figure The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, P_W, equals $100. The government imposes a quota restricting imports to 25 calculators. If import licenses are granted to foreigners, the net loss due to the import quota is equal to area:

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Use the following to answer questions:
Figure: The Market for Calculators

-(Figure: The Market for Calculators) Look at the figure The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, P_W, equals $100. The government imposes a quota restricting imports to 25 calculators. If import licenses are granted to foreigners, the net loss due to the import quota is equal to area:

Quizplus · Accepted Answer

The net loss due to the import quota is equal to the deadweight loss (G + H + I + J) plus the loss to domestic consumers (K + L). Therefore, the correct choice is C, which includes both G + H + I + J and K + L.

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